(Sharecast News) - Asian markets ended mixed on Friday, with South Korea's Kospi extending its record-breaking rally even as broader sentiment weakened across the region amid renewed concerns over US banking risks and trade tensions.
Patrick Munnelly, market strategy partner at TickMill, noted that "global markets took a hit as shares of US regional banks tumbled amid growing concerns over lending standards," adding that "a promising market rally, driven by yet another optimistic projection for artificial intelligence demand, lost steam as concerns over hidden financial vulnerabilities resurfaced."
Korean stocks in the green, other bourses fall
In Seoul, the Kospi edged up 0.01% to close at 3,748.89, marking its third consecutive record high as optimism over ongoing trade talks with Washington continued to underpin investor confidence.
Gains were led by LF Co, which surged 12.8%, Hanon Systems, up 9.97%, and Posco ICT, which advanced 8.7%.
Elsewhere in Asia, markets retreated in line with Wall Street's losses after fears mounted about potential bad loans within the US banking sector, dragging down regional sentiment.
Munnelly said, "The MSCI Asia Pacific Index dropped, with financial stocks bearing the brunt of the losses.
"US equity index futures also fell after Thursday's decline, and European [markets] are opening lower.
"Amid the turbulence, traditional safe-haven assets like gold and silver surged to record highs."
Japan's Nikkei 225 fell 1.48% to 47,565.50, with sharp losses for Toho, Sompo Holdings and Furukawa Electric, which dropped 5.25%, 4.72% and 4.66% respectively.
The broader Topix slipped 1.03% to 3,170.44.
"In Japan," Munnelly observed, "Bank of Japan Governor Kazuo Ueda hinted at the possibility of further policy normalisation, stating that an interest rate hike could be on the table if confidence in the country's economic outlook improves.
"Meanwhile, political developments added to the uncertainty, as the ruling Liberal Democratic Party explored the possibility of forming a coalition with the opposition party Ishin."
In China, equities slumped as concerns over property and manufacturing weakness weighed on the market.
The Shanghai Composite declined 1.95% to 3,839.76, while the Shenzhen Component shed 3.04% to 12,688.94.
Heavy losses were recorded for Guangdong Songyang Recycle Resources, Wolong Real Estate Group and Shengyi Technology, each down 10%.
Hong Kong's Hang Seng Index tumbled 2.48% to 25,247.10, led lower by technology and renewables stocks.
BYD Electronic International sank%, Xinyi Solar slid and SMIC dropped more than 6% by the late afternoon.
Munnelly highlighted that "concerns about credit quality in the US economy, coupled with escalating US-China trade tensions, drove demand for precious metals" and that "Treasury yields continued their downward trend, with the two-year yield hitting its lowest point since 2022 and the 10-year yield dipping below 4%."
In Australia, the S&P/ASX 200 fell 0.81% to 8,995.30, pressured by a 9.25% decline in QBE Insurance Group alongside steep drops for DroneShield and Life360, down 8.02% and 7.98% respectively.
New Zealand's S&P/NZX 50 also weakened, down 0.75% to 13,289.21, with Eroad plunging 34.72%, KMD Brands off 4.69% and Westpac Banking Corporation losing 3.89%.
In currency markets, the yen strengthened 0.51% to JPY 149.66 per dollar, while the greenback rose 0.34% on the Aussie to AUD 1.5474 and gained 0.07% against the Kiwi to change hands at NZD 1.7483.
Oil prices added to regional headwinds, as Munnelly noted that "oil prices were on track for a third consecutive weekly decline as concerns over oversupply and renewed US-China trade tensions weighed on the market."
Brent crude futures were last down 0.46% on ICE to $60.78 per barrel, and the NYMEX quote for West Texas Intermediate slipped 0.49% to $57.18.
Munnelly said that "Brent crude hovered around $61 per barrel as President Trump announced plans for a second meeting with Russian president Vladimir Putin, raising speculation that increased production from OPEC+ members could worsen the global oil surplus."
Unemployment eases in Korea, Singapore exports rebound
On the economic front, South Korea's labour market showed further signs of resilience in September, with the unemployment rate easing to 2.5% from 2.6% in August, according to data from Statistics Korea.
The figure came in below expectations, supported by continued hiring across services and manufacturing sectors.
The number of employed people rose to 29.15 million, marking an increase of 310,000 from the previous month and 312,000 compared with a year earlier, highlighting steady employment growth despite broader global economic uncertainty.
In Singapore, exports rebounded sharply after months of weakness, signalling renewed momentum in trade.
Non-oil domestic exports grew 6.9% year-on-year in September, reversing an 11.5% drop in August and marking the first expansion in three months, data from Enterprise Singapore showed.
Electronics led the recovery with a 30.4% surge in shipments of integrated circuits, personal computers and disk media products.
Non-electronic exports also edged higher, rising 0.4% as sales of non-monetary gold and specialised machinery jumped 82.7% and 14.1% respectively, underscoring a broad-based improvement in external demand.
Reporting by Josh White for Sharecast.com.
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