Asian stocks eye best week since June as softer US inflation extends tech rebound

Asian stocks experienced their best weekly performance since mid-June, buoyed by softer U.S. inflation data and a rebound in the technology sector. The Nasdaq 100 Futures lost about 0.1% in Friday's Asian trading, while S&P 500 Futures remained steady. The Federal Reserve's expectations of a rate hike have softened, with Fed funds futures now suggesting a 35% chance of a hike, down from 55% a week prior.

The MSCI AC Asia Pacific equity gauge climbed 0.5%, targeting a 2.7% weekly gain and marking the fourth consecutive week of gains. South Korea's KOSPI increased 1.6%, Japan's Nikkei 225 rose 0.7%, and the TOPIX gained 0.8%. SK Hynix saw a 3.2% weekly gain, while Samsung Electronics rose 0.9%. The KOSPI has recovered 23% since hitting its low in late July, exiting the bear-market phase following the July 22% plunge, which was its worst monthly decline since the global financial crisis.

However, SK Hynix's gains surpassed 15%, while Samsung Electronics also posted a more than 15% weekly gain. Other notable gains included LG Innotek at 4.1%, and Japan's chip sector showing strength with Kioxia Holdings up 3.4%, LARGAN Precision gaining 2%, and TDK remaining flat. Sony rose 5.2%, whereas Murata Manufacturing slipped 0.5%.

In China, the Shanghai Shenzhen CSI 300 fell 0.12%, and the Shanghai Composite dropped 0.2%. Hong Kong's Hang Seng index declined 0.9%. Chinese chip stocks exhibited pockets of strength, with Semiconductor Manufacturing International Corp (HK:0981) gaining 2.2% due to strong AI-related demand in its Q2 earnings. NetEase increased 1.8%, and Tencent added 0.5%.

Despite this, Baidu fell 1.55%, Alibaba dropped 2.30%, and Meituan sank 5.53%, while JD.com plummeted 10% after reporting revenue declines for the first time in over a decade, highlighting ongoing concerns over Chinese consumer demand. Australia's S&P/ASX 200 fell 0.9%, India's Nifty 50 opened 0.3% lower, and Singapore's FTSE Straits Times Index was relatively unchanged.

Oil prices settled near $87 a barrel after a brief decline the previous day, with Brent oil poised for a 4% weekly gain, ending a two-week downward trend, driven by renewed U.S. pressure on Iran and the slow progress in resolving the conflict.