Asian stocks mostly rise as South Korea leads rebound; Nikkei set for weekly loss

Asian stocks experienced a mostly positive trend on Friday, with South Korea leading the regional recovery as technology shares staged a comeback, despite concerns over high oil prices and rising global bond yields. U.S. Treasury yields showed signs of increasing after the Wednesday buyback announcement, with the 10-year yield hovering around 4.7% and the 30-year near 5.3%.

Wall Street also suffered losses overnight due to rising yields, higher oil prices, and worries about U.S. debt, which dampened risk appetite. Treasury Secretary Scott Bessent hinted that buybacks could surpass the planned $4 billion per operation, alongside a broader fiscal-consolidation plan. However, investors remained skeptical about whether these measures could significantly tackle a U.S. budget deficit above 6% of GDP and annual interest costs of approximately $1.2 trillion.

Asian markets demonstrated more resilience, with Nasdaq 100 Futures inching up around 0.3% and S&P 500 Futures rising 0.2% following the previous day's sell-off. The MSCI AC Asia Pacific index edged up by about 0.7%, though it was still on course for a weaker week. Japan and South Korea were set for weekly declines, while Hong Kong bucked the trend.

The KOSPI recovered from earlier losses to trade nearly 1% higher, but remained around 0.9% lower for the week. This rebound was fueled by Korean semiconductor stocks, with SK Hynix up about 3% and Samsung Electronics gaining around 2% for the week. These two stocks have been the primary drivers of the KOSPI's fluctuations this week, following SK Hynix's 40 trillion-won share buyback and Samsung's potential 110 trillion-won shareholder-return package.

Japan's Nikkei 225 saw a slight decline of around 0.4%, retaining its position as one of the weakest major benchmarks in the region. The drop was attributed to mounting concerns over rising Japanese inflation and the potential implications for Bank of Japan policy. In July, Japan's core CPI surged 1.8% year-on-year, prompting expectations of an early September rate hike by the BOJ.

Hong Kong emerged as the sole bright spot among Asian markets, with the Hang Seng surging about 3% for the week, ending a two-week losing streak despite remaining cautious about recent moves in global technology shares. Alibaba shares fell 3% after reporting a more than 75% plunge in quarterly profit, driven by a 75% surge in capital spending to nearly $10 billion, as the company intensified its push into AI infrastructure.

Henderson Land also enjoyed a more than 7% gain after delivering upbeat first-half results, providing a stock-specific silver lining to Hong Kong trading. Oil prices persisted at elevated levels as Middle East diplomatic efforts showed little progress. Brent crude touched a one-month high of $94.71 before settling around $93.12, marking a more than 5% increase for the week.

Recent U.S. pressure on Iran, including threats of stricter sanctions, further dampened hopes for the full reopening of the Strait of Hormuz. Bank Indonesia maintained its seven-day reverse-repurchase rate at 5.75% on Wednesday, as expected, marking the first policy decision under acting Governor Destry Damayanti. The Jakarta Stock Exchange Composite Index climbed 0.5% on Friday, on track to finish the week over 2% higher.

India's Nifty 50 opened modestly higher and remained around 0.4% lower for the week. Australia's S&P/ASX 200 slipped 0.4%. Attention now shifts to Nvidia's earnings and next week's Jackson Hole symposium, which will serve as a crucial test for the technology trade and Fed outlook.