Asia report: Markets finish turbulent week in a mixed state

Asia-Pacific markets finished with a mixed performance on Friday, reflecting investor caution amid global uncertainties, particularly around rising tensions in the Middle East.

Crude futures continued to climb as concerns over a potential Israeli strike on Iran’s oil infrastructure added to the volatility, as investors looked ahead to the US payrolls report for September.

“Escalating tensions in the Middle East have cast a shadow over global markets ahead of the weekend, and oil prices are on the brink of their largest weekly gain in over a year on Friday,” said Patrick Munnelly at TickMill.

“Despite the fact that the majority of equity indexes and stock futures are in positive territory, investors are speculating about the possibility of imminent retaliatory strikes by Israel against Iran, which is limiting their gains.

“Brent crude futures are anticipated to experience a weekly increase of approximately 8%, which would be the most significant since February 2023.”

US crude futures were meanwhile expected to experience a weekly increase of 8.2%, which Munnelly noted would be the largest since March of last year.

“Despite the fact that US president Joe Biden has stated that he does not anticipate a ‘all-out war’ in the Middle East, he has previously suggested that the US was considering strikes on Iran's oil facilities as a response to Tehran's missile attack on Israel.

“In spite of the fact that oil prices have returned to the levels they were at just one month ago and oil has recovered from a low base, the pressure on world stocks and investors' risk appetite is beginning to mount.

“Should oil prices continue to increase and geopolitical tensions persist, investors may need to reevaluate their inflation forecasts. Jerome Powell, the chairman of the Federal Reserve, is likely also being kept on his toes by the possibility of a broader conflict in the Middle East.”

Markets in a mixed state as Hong Kong resumes rally

In Japan, the Nikkei 225 gained 0.22%, closing at 38,635.62, while the broader Topix index added 0.39% to 2,694.07.

Leading the gains on Tokyo’s benchmark were Mercari, which surged 5.31%, followed by M3 and Japan Steel Works, up 4.98% and 4.12%, respectively.

China’s markets remained closed for the National Day holiday, but in Hong Kong, the Hang Seng Index jumped 2.82% to 22,736.87, buoyed by optimism around potential stimulus measures from Beijing.

Semiconductor Manufacturing International Corporation (SMIC) soared 29.31%, leading the charge, while WuXi Biologics and Xinyi Glass saw substantial gains of 14.46% and 12.42%, respectively.

South Korea’s Kospi 100 index edged up 0.35% to 2,573.45, with Hanwha Techwin climbing 9.05% and Korea Zinc adding 8.84%.

Yuhan also rose by 5.74%, contributing to the overall positive momentum in the market.

Australia's S&P/ASX 200, however, fell 0.67% to 8,150.00, with losses led by Clarity Pharmaceuticals, down 12.14%, and GQG Partners, which dropped 4.8%.

Liontown Resources also declined by 3.9%, reflecting a cautious mood among investors.

In New Zealand, the S&P/NZX 50 gained 0.38% to close at 12,619.94, helped by a 5.41% rise in Sanford and a 2.98% gain in Ryman Healthcare.

Fonterra Shareholders Fund also added 2.83%, contributing to the market's modest gains.

In currency markets, the dollar was last down 0.3% on the yen at JPY 146.49.

The greenback was also off 0.02% on the Aussie at AUD 1.4617, while it managed gains of 0.17% on the Kiwi, last changing hands at NZD 1.6124.

Oil prices continued their upward momentum, with Brent crude futures last up 1.66% on ICE at $78.91 per barrel, and the NYMEX quote for West Texas Intermediate gaining 1.71% to $74.97.

Reporting by Josh White for Sharecast.com.