Dour sentiment persisted in the Asian trading day on Friday as concerns about technology company valuations weighed on shares and Middle East tensions kept energy markets on edge.

In Hong Kong, the benchmark Hang Seng Index opened 66 points, or 0.3 percent, higher at 26,447.

The China enterprises index was up three points at 8,817 while the tech index was seven points, or 0.2 percent, higher at 5,117.

On the mainland, the benchmark Shanghai Composite Index down 0.43 percent to open at 4,128.9 points.

The Shenzhen Component Index was 0.89 percent lower at 14,375 while the ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, was down 1.23 percent at 3,303.

Japanese shares followed Wall Street lower after what appeared to be glowing results from AI sector bellwether Nvidia failed to impress investors.

⁠The yen and US Treasuries rose while gold held steady after a two-day advance.

An Omani mediator of US and Iran nuclear talks gave an optimistic readout over the latest round of negotiations, but uncertainty still hung over energy markets with no sign of a breakthrough that would avert potential US air strikes.

"AI and geopolitics remained front and centre for financial markets, prompting a retreat from risk assets and a shift towards safe havens," Mantas Vanagas, senior economist at Westpac Group, wrote in a note.

"With no major breakthroughs announced in the US–Iran talks, crude markets remained in wait-and-see mode, continuing to price in a significant risk of military escalation between the two countries," he said.

MSCI's broadest index of Asia-Pacific shares outside ⁠Japan was down 0.4 percent while Japan's Nikkei stock index slid 0.8 percent.

Nvidia posted better-than-expected results for the January quarter on ⁠Wednesday and forecast current-quarter revenue above market estimates.

But US shares ended lower and the company's stock was flat in after-hours trading.

"It seems 'the ⁠Street' simply wanted more, or perhaps just isn't prepared to chase the stock at its current lofty valuation," IG market analyst Tony Sycamore said about Nvidia's results in a note.

China's central bank said on Friday it would scrap the foreign exchange risk reserves for some forward contracts, a move that would reduce the cost of dollar buying.

The yuan notched its biggest annual gain against the dollar since 2020 last year, strengthening past the psychologically important seven-per-dollar level, and the upward momentum has continued into the new year. (Reuters & Xinhua)


Edited by Tony Sabine