Investing.com-- Most Asian stocks moved in a flat-to-low range on Friday amid growing concerns over increased U.S. trade tariffs and sticky inflation, while an artificial intelligence-fueled rally in Chinese stocks powered on.
Regional markets took limited cues from a strong overnight close on Wall Street, as investors were relieved by U.S. President Donald Trump not immediately imposing reciprocal tariffs, as he had earlier threatened.
But U.S. stock index futures were flat in Asian trade, given that Trump still signed an order outlining plans to impose higher duties on major U.S. trading partners. Hotter-than-expected producer inflation data also added to angst over higher for longer interest rates, following a strong consumer inflation reading earlier this week.
Chinese shares- particularly major tech stocks in Hong Kong- remained key outperformers in Asia, especially after the release of the DeepSeek AI in late-January.
Australian markets also hit record highs, as investors positioned for an interest rate cut by the Reserve Bank of Australia next week.
Other Asian markets were less upbeat. Japan’s Nikkei 225 and TOPIX indexes fell 0.5% and 0.1%, respectively, as local exporters were pressured by a sharp overnight recovery in the yen.
Singapore’s Straits Times index fell 0.4%, even as the country’s fourth-quarter gross domestic product grew much more than expected.
South Korea’s KOSPI added 0.4% on persistent gains in tech stocks, while futures for India’s Nifty 50 index pointed to a flat open, as investors digested mixed signals from a meeting between Trump and Prime Minister Narendra Modi.
While Modi and Trump flagged plans for greater trade, defense and policy cooperation between Washington and Beijing, Trump still chided India’s steep duties on U.S. imports- which could attract greater reciprocal tariffs.
Hong Kong stocks up as DeepSeek rally powers on
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes moved in a flat-to-low range. But Hong Kong’s Hang Seng index soared 1.6% and remained close to a four-month high.
Gains were fueled chiefly by sustained buying into heavyweight tech stocks, as the release of DeepSeek R1 in late-January fueled renewed optimism in China’s AI capabilities.
Morgan Stanley (NYSE:MS) analysts said that DeepSeek had helped shore up sentiment towards Chinese markets, especially the blue-chip A shares. But they warned that lingering weakness in other aspects of the country, especially a rampant disinflationary trend, had caused a divergence between tech and non-tech sectors.
Australia shares hit record high on RBA rate cut bets
Australia’s ASX 200 rose 0.5% to a record high of 8,615.20 points, on gains across most heavyweight sectors.
Local stocks were boosted by growing confidence that the RBA will cut interest rates by 25 basis points at a meeting next week, and kick off a shallow easing cycle on concerns over a slowing Australian economy.
Some soft inflation data in recent weeks also fueled bets on an RBA cut, although inflation remained well above the central bank’s 2% to 3% target range.
Australian stocks were also boosted by gains in major mining stocks, as traders bet that tropical cyclone Zelia- which is set to hit key mining regions in the country- will disrupt supplies, pushing up commodity prices.