(Sharecast News) - Asia-Pacific markets traded mostly lower on Friday as a sharp pullback in precious metals weighed on resource stocks and investors digested mixed signals from the United States, where technology earnings pressured equities even as political uncertainty eased.
The retreat came after a powerful rally in gold and silver this year, while US president Donald Trump endorsed a Senate funding deal that reduced the risk of a near-term government shutdown.
As Patrick Munnelly, market strategy partner at TickMill, noted, "markets took a hit as both stocks and US Treasuries declined amid growing speculation that president Trump is leaning toward nominating Kevin Warsh as the next Federal Reserve chair," a development that has unsettled investors given Warsh's reputation as a more hawkish policymaker.
Gold and silver prices fell sharply after hitting record highs a day earlier as investors took profits, with the sell-off exacerbated by a firmer US dollar.
Spot gold dropped more than 4% to $5,156.64 per ounce, though it remained around 20% higher year to date, while silver slid over 5% to $110.26 per ounce but was still up 53% so far this year.
Munnelly said "precious metals experienced a faltering recovery that lost steam following a very volatile trading session on Thursday," adding that "the pullback, driven by the unwinding of overly extended positions, was somewhat expected in the precious metals market."
He noted that gold had "declined below $5,150 overnight, while silver skidded sub $105," as traders adjusted positioning.
The pullback followed overnight losses in the S&P 500 and the tech-heavy Nasdaq, while US stocks were mixed and Bitcoin fell sharply, with Munnelly adding that "cryptocurrencies, led by Bitcoin, experienced a notable selloff."
Tokyo in the red as investors digest fresh data
In Japan, the Nikkei 225 slipped 0.1% to 53,322.85, dragged down by steep declines in Nomura Research Institute, which plunged 17.31%, Nexon, down 10.63%, and Tokuyama Corporation, which fell 7.83%.
The broader Topix outperformed, rising 0.59% to 3,566.32.
Economic data painted a mixed picture, with retail sales falling 0.9% year-on-year in December and down 2.0% on the month, while industrial production declined 0.1% month-on-month for a second straight drop but rose 2.6% from a year earlier.
The unemployment rate held at 2.6%, with unemployment rising to a 17-month high of 1.86 million, and Tokyo core consumer prices easing to 2% in January.
Housing starts fell 1.3% year on year, a milder contraction than expected, supported by a return to growth in built-for-sale housing.
Chinese equities were weaker, with the Shanghai Composite falling 0.96% to 4,117.95 and the Shenzhen Component down 0.66% to 14,205.89.
Losses were broad-based, led by Shandong Nanshan Aluminium, Henan Huanghe Whirlwind and Guangdong Meiyan Jixiang Hydropower, each down about 10%.
In Hong Kong, the Hang Seng Index dropped 2.08% to 27,387.11, weighed down by sharp declines in CSPC Pharmaceutical Group, China Hongqiao Group and Zijin Mining Group, all of which fell more than 9%.
Munnelly said the broader regional backdrop was fragile, noting that "the MSCI Asia-Pacific index fell 0.7%, while S&P 500 futures slipped 0.4%," as investors reassessed risk assets.
South Korea bucked the regional trend, with the Kospi 100 rising 0.41% to 5,897.08, supported by gains in SK Square, up 7.34%, KT&G, which added 5.7%, and S-Oil Corporation, up 5.58%.
Sydney, Wellington bourses diverge
In Australia, the S&P/ASX 200 slid 0.65% to 8,869.10 as mining stocks retreated alongside weaker metals prices, with Genesis Minerals down 9.86%, Liontown Resources falling 9.51% and Newmont Corporation off 8.06%.
Looking ahead, Munnelly said attention was shifting to next week's central bank meetings, noting that "markets view a rate hike by the Reserve Bank of Australia to 3.85% as more likely than not, though it's not guaranteed".
New Zealand equities were firmer, with the S&P/NZX 50 gaining 0.56% to 13,423.18, led by Synlait Milk, Property for Industry and SkyCity Entertainment Group.
Consumer confidence improved markedly, with the ANZ-Roy Morgan index rising to 107.2 in January, its highest level since August 2021, and indicators of current and future conditions reaching multi-year highs.
Dollar strengthens, oil prices in the red
In currency markets, the dollar strengthened, last trading up 0.73% on the yen at JPY 154.23, as it rose 1.04% against the Aussie to AUD 1.4333 and gained 0.64% on the Kiwi to change hands at NZD 1.6557.
Munnelly said a potential shift toward tighter US monetary policy was underpinning the move, noting that "a more hawkish stance could signal tighter financial conditions, potentially slowing economic growth, pressuring equities, and driving bond yields higher," while adding that "on the flip side, the dollar could gain further strength in a higher interest rate environment."
Oil prices fell, with Brent crude futures last down 1.02% on ICE at $69.99 per barrel, and the NYMEX quote for West Texas Intermediate off 1.1% at $64.70, after Trump said he intended to speak with Iran, even as the US deployed another warship to the Middle East and defence secretary Pete Hegseth said the military stood ready to act on the president's instructions.
Reporting by Josh White for Sharecast.com.
51.78 (0.51%)
15.08
0.00