BENGALURU: Asian currencies and stocks retreated on Friday as renewed hostilities in the Middle East lifted oil prices and dampened risk appetite, although a resilient AI rally drove South Korean stocks to log their best week since late 2008.
Equities in Seoul hit a record closing high, gaining 13.6 percent this week.
The benchmark crossed the 7,000 mark for the first time earlier in the week, led by the world’s No.1 and No.2 memory chipmakers - Samsung Electronics and SK Hynix .
“While Korea can look pricey on past earnings, it still looks relatively cheap when you factor in expected future growth,” said Herald van der Linde, head of equity strategy, Asia Pacific, at HSBC, shrugging off valuation concerns after the benchmark’s over 78 percent rally this year.
Taiwan stocks ended the session down 0.8 percent, but rose 6.9 percent for the week. The optimism was not seen in other parts of the market, after oil prices rose about 1 percent on Friday as renewed fighting broke out between the US and Iran, testing a fragile ceasefire.
The rise in crude renewed pressure on Asian currencies as concerns grew over the burden of pricier oil on importing countries’ balance sheets. Inflation in South Korea, Thailand, and the Philippines climbed to multi-year highs in April.
“High energy prices have started to percolate through to the real economy, with upside inflation surprises in parts of ASEAN,” DBS said in a note. The Philippine peso weakened to 60.508 per dollar. The currency is among the hardest hit in Asia, hitting a record low earlier in the week and falling nearly 5 percent since the Iran war began in late February.
Higher energy bills fanned inflation in the Southeast Asian country to a three-year high in April and limited first-quarter economic growth, which came below expectations.