Asian stocks slumped on Friday, poised for a second straight weekly decline as fast-dwindling hopes of a resolution to the US-Israel attacks on Iran kept oil prices aloft, casting a shadow over global markets and spurring inflation fears.

In Hong Kong, the benchmark Hang Seng Index fell 133 points, or 0.52 percent, to open at 25,583.

The China enterprises index was 28 points, or 0.3 percent, lower at 8,670 while the tech index was 21 points, or 0.4 percent, lower at 5,006.

On the mainland, the benchmark Shanghai Composite Index opened down 11 points, or 0.28 percent, at 4,117.

The Shenzhen Component Index was almost 74 points, or 0.51 percent, lower at 14,300 while the ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, was down 0.63 percent at 3,296.

Oil prices remained close to the closely watched US$100 per barrel level, although they eased a bit in early trading on Friday after United States allowed countries to buy Russian oil and petroleum products currently stranded at sea for 30 days.

Brent futures were last at US$99.85 a barrel, while West Texas Intermediate crude was at US$95.05 a barrel.

MSCI's broadest index of Asia-Pacific shares eased 0.5 percent, on course for a 1.5 percent decline for the week.

In Tokyo, the 225-issue Nikkei Stock Average opened down 865 points, or 1.59 percent, at 53,587 but recouped some of its losses to hover near the 53,919 mark near midday.

In Seoul, the Korea Composite Stock Price Index opened down 170 points, or 3.06 percent, to 5,412 but clawed back some of its losses to be near 5,531 by midday, down 51 points or 0.93 percent.

With Iran stepping up attacks across the Middle East as its new supreme leader, Mojtaba Khamenei, vowed to keep the Strait of Hormuz shipping lane closed, investors are ⁠bracing for a prolonged conflict and higher oil prices.

The spectre of rising inflation has led markets to rapidly reprice what ⁠they expect from central banks this year, ⁠with traders now anticipating just 20 basis points of easing from the US Federal Reserve compared to 50 bps of cuts priced in last month.

"Markets were positioned for Fed cuts this year but the runway to justify Fed cuts is no longer there with the ⁠US excursion into Iran," said Prashant Newnaha, senior rates strategist at TD Securities. "The ‌markets are recalibrating for a higher terminal rate." (Reuters & Xinhua)


Edited by Edmond Fong