Oil prices surge, Asian stocks sink as tech extends losses

Asian markets continued to decline on Friday as investors became increasingly doubtful about the tech sector. The yen and government bonds saw a boost from the risk-averse mood. Oil prices, pushed higher by Middle East concerns, approached $115 per barrel for the first time since May. This came after Iran threatened to target US bases in the region if its forces kept escorting ships through the Strait of Hormuz.

The surge in oil prices aggravated inflation, leading central banks to raise interest rates and increase borrowing costs for governments to multi-decade highs. Despite strong earnings from some companies in the past, investors now expect better results to justify their investments. Even Facebook-parent Meta and chip equipment maker Lam Research, which reported better-than-expected earnings, saw their shares drop.

Positive news is no longer enough if the outlook fails to meet the high valuation standards. Investors are becoming less forgiving, and the shift away from tech has benefited industrial companies. The Dow rose, while the Nasdaq and S&P 500 fell. The losses in New York spread to Asia, with Seoul shedding over 2 percent on a tough week for the Kospi index.

SK hynix's US shares fell more than 8 percent after it canceled plans for an initial public offering for its US subsidiary Solidigm, citing market conditions and share price trends. Tokyo's Nikkei 225, heavily reliant on tech, was sharply down, along with Hong Kong, Shanghai, Sydney, Singapore, Wellington, Jakarta, and Manila. Taipei was closed due to Typhoon Champi approaching the island.

Safe-havens like the yen and US Treasuries gained, with the yen strengthening against the dollar and yields falling from multi-decade highs. Investors are seeking safe havens amid ongoing concerns over AI and the tech sector, along with surging oil prices, pushing back into bonds.