Asian stocks drop, but set for weekly gains

Investor sentiment had been buoyed by signs of de-escalation in the Middle East

Asian stocks edged lower on Friday as investors locked in profits after strong gains earlier in the week, although markets remained on track for weekly advances amid hopes for renewed U.S.-Iran peace talks.

Investor sentiment had been buoyed by signs of de-escalation in the Middle East. However, the recent rally prompted some profit-taking on Friday.

Despite Friday’s decline, Asian markets were still set to post weekly gains.

Nikkei 225 dropped 0.8 per cent to 59,037.0 points, but was set to gain 3.5 per cent for the week. The benchmark hit a record high of 59,719 points on Thursday. The broader TOPIX index slid 1.1 per cent on Friday.

KOSPI edged down 0.3 per cent, remaining on track for a 6 per cent weekly jump.

Technology-heavy indexes led much of the week’s gains on optimism around artificial intelligence-driven earnings growth.

SK Hynix shares were set to surge more than 10 per cent for the week, hitting record highs on Wednesday.

Strong earnings from Taiwan Semiconductor Manufacturing Co on Thursday reinforced confidence in the sector. The world’s largest contract chipmaker reported a nearly 58 per cent jump in quarterly profit to a record level, driven by surging global demand for AI processors.

Shanghai Composite and Hang Seng indices headed for a 1.5 per cent weekly gain, each. Both indices declined modestly on Friday.

Data on Thursday showed China’s economy started the year on a firm footing. The world’s second-largest economy grew 5.0 per cent year-on-year in the first quarter, beating expectations and accelerating from 4.5 per cent in the previous quarter, while quarterly growth came in at 1.3 per cent.