Asian Stocks Weaken, Ahead of NFP
Asian stocks fell on Friday as investors began to reduce exposure to artificial intelligence (AI) stocks and refocused on Middle East geopolitical risks. The MSCI Asia Pacific Index fell 0.8%, led by South Korea's more than 4% decline, marking a shift in sentiment after the previous rally, driven largely by technology stocks.
The biggest pressure came from the semiconductor sector as the AI hype began to cool. US index futures also weakened, with Nasdaq 100 futures falling about 0.7% after its underlying index fell for two consecutive days. The market saw a rotation: investors trimmed positions in chip stocks and began shifting funds to sectors considered more resilient if the economy remained solid, as evidenced by the Dow Jones Industrial Average hitting a record.
In commodities, Brent held steady at around US$95.20/barrel, after falling in the previous session on hopes the US and Iran were nearing a diplomatic breakthrough following a conditional Israel-Lebanon ceasefire. However, this optimism was not entirely smooth sailing as Hezbollah rejected the US ceasefire proposal, while headlines regarding US-Iran negotiations also clashed.
Other assets moved relatively subdued: gold held around US$4,460/oz, Treasurys rallied on Thursday as markets seized on the opportunity for de-escalation, and Bitcoin edged up to around US$63,700. However, regional tensions remained a source of volatility after Iran and the US exchanged renewed attacks, while several Asian currencies came under pressure, with the South Korean won even touching its weakest level since 2009, raising concerns about central banks' capacity to maintain exchange rates.
Market focus now turns to US jobs data on Friday. Weekly jobless claims rose to their highest level since February, and the Challenger report showed layoffs in the tech sector reached a nearly two-year high. With the two major themes of AI and the US-Iran conflict still dominating, the payrolls report will be a key indicator of whether the market begins to price in the risk of higher interest rates or sees room for stabilization amid fragile sentiment. (asd)
Source: Newsmaker.id
