Asian stocks mixed, but set for sharp weekly losses

KOSPI dropped 1%, Nikkei 225 edged 0.6% higher, Hang Seng gained 2%, S&P/ASX 200 index slid 1%, while Straits Times Index traded flat

Asian stocks were mixed on Friday but remained on track for sharp weekly losses as escalating war in the Middle East and a surge in oil prices weighed on investor sentiment.

Investor sentiment has been shaken by the escalating war involving the U.S., Israel and Iran, which entered its seventh day on Friday with no signs of easing.

The war has raised fears of disruptions to global energy supplies, particularly through the Strait of Hormuz, a narrow shipping route through which around one-fifth of global oil supply passes.

Oil prices have surged sharply this week as traders priced in the risk of supply disruptions from the Middle East, having jumped more than 15% this week.

The spike in crude prices weighed heavily on Asian equities and currencies, particularly in major oil-importing countries such as South Korea.

KOSPI dropped 1%, and was set for a weekly slump of nearly 12%.

Nikkei 225 edged 0.6% higher, but remained on track for a 6% weekly decline.

In China, Shanghai Composite and Shanghai Shenzhen CSI 300 indexes were set to drop more than 1% this week.

Hang Seng gained 2%, but was set for a 3% weekly decline.

Nifty 50 index edged lower and was set to drop 2% this week.

S&P/ASX 200 index slid 1%, while Straits Times Index traded flat.

Rising oil prices have also fuelled concerns about inflation globally, potentially complicating the policy outlook for central banks.

Higher energy costs tend to feed into broader price pressures, which could make policymakers more cautious about cutting interest rates in the near term.