Asian stock markets largely moved lower on Friday, with technology shares driving much of the weakness after equities in the United States finished the prior session under pressure. A sharp drop in a major U.S. technology name weighed on risk sentiment, while local newsflow - most notably Tokyo's consumer price figures - kept attention on the likely path of Bank of Japan monetary policy.
Across the region, a number of markets that had posted strong advances earlier in the month saw profit-taking as investors trimmed positions after extended rallies. Chinese equities led the retreat among mainland and regional benchmarks, while some markets still looked set to post solid monthly gains despite the pullback.
In New York, major indexes closed lower overnight, with selling concentrated in technology. Microsoft (MSFT) plunged roughly 10% as investors reacted to concerns that the company's elevated artificial intelligence spending may not generate commensurate returns and that its cloud growth had lagged expectations. The drop in that high-profile stock contributed to a more cautious tone for risk assets, and U.S. futures were modestly lower during Asian trading hours.
On the mainland, the blue-chip Shanghai Shenzhen CSI 300 and the Shanghai Composite each fell by more than 1% as Chinese shares led regional declines. Hong Kong's Hang Seng index dropped nearly 2%, with the Hang Seng TECH sub-index sliding by a similar magnitude. Despite that decline, Hong Kong was on track for a strong January, set to gain over 7% for the month.
Singapore's Straits Times Index eased 0.2% after earlier in the session reaching a record high; the index remained positioned for about a 6% rise in January. Australia's S&P/ASX 200 lost 0.6% on the day but was nevertheless on track for a roughly 2% increase for the month. Futures for India's Nifty 50 moved down marginally, edging 0.3% lower.
Not all markets followed the regional downtrend. South Korea's KOSPI climbed 0.5%, buoyed by strong performances from heavyweight chipmakers. SK Hynix (000660.KS) and Samsung Electronics (005930.KS) extended gains after reporting stellar earnings a day earlier, helping lift the index. The KOSPI was poised for exceptional monthly gains of nearly 25% for January.
Japan's major averages ticked lower, with the Nikkei 225 down 0.4% and the broader TOPIX off 0.3%. The Nikkei was nevertheless set to finish the month up by more than 5%, although part of those gains were pared by a firmer yen.
Tokyo's consumer price report showed inflation in the capital easing to its lowest level in roughly four years, signaling a cooling in price pressures. The BOJ's preferred core inflation gauge - which excludes fresh food - also moderated from the prior month but remained slightly above the central bank's 2% target. That persistence in the core measure means that market expectations for near-term BOJ tightening have not been fully extinguished and kept policy discussions at the forefront of investor attention.
Overall, the session underscored a cautious environment where technology sector volatility and central bank-related data were central to market moves, while a number of regional indices remained on track for meaningful monthly advances despite short-term profit-taking.