SEOUL: Asian stock markets fell on Friday, with South Korea’s Kospi leading early losses, as investors weighed another extension in U.S.-Iran diplomacy against continued disruption to energy flows and a sharp overnight selloff on Wall Street. The broader MSCI index of Asia-Pacific shares outside Japan was down 0.7%, heading for a fourth straight weekly decline. South Korean shares later trimmed much of their drop, but remained lower at the close after a volatile session that tracked swings in oil and bond markets.
The regional retreat followed Wall Street’s steepest decline since the Iran conflict began. On Thursday, the S&P 500 fell 1.7%, the Dow Jones Industrial Average lost 1%, and the Nasdaq dropped 2.4%, leaving the technology-heavy index in correction territory. In Asia on Friday, Japan’s Nikkei edged down 0.1%, while mainland Chinese blue chips and Hong Kong’s Hang Seng each rose 0.7%. Brent crude slipped 0.7% to about $107.23 a barrel after jumping nearly 6% the previous night.
U.S. President Donald Trump said he was pausing attacks on Iran’s energy plants for 10 days until April 6 and said talks were going very well. Iran’s Foreign Minister Abbas Araqchi said on state television that Tehran was reviewing a U.S. proposal conveyed through mediators, but added that the exchange of messages did not amount to negotiations or dialogue. The mixed official signals came as fighting continued in the Middle East and as concerns over shipping and fuel supplies kept financial markets on edge.
Diplomatic Signals Remain Mixed
South Korea remained at the center of the market reaction because of both the size of its earlier rally and its exposure to Middle East energy supplies. Reuters reported that about 70% of the country’s crude imports and 30% of its gas imports came from the region in 2025, with those shipments passing through the Strait of Hormuz. The Kospi, which had surged before the conflict, opened nearly 3% lower on Friday and at one point fell more than 4% before paring losses through the afternoon.
By the close, the benchmark Kospi was down 0.4% at 5,438.87, after a session marked by dip-buying and heavy turnover. Authorities in Seoul had already moved to cushion the impact of higher energy prices and tighter financial conditions. The government announced a 5 trillion won emergency bond buyback to add liquidity and cap yields, expanded fuel tax breaks, and prepared a supplementary budget of 25 trillion won to support households and businesses facing rising costs linked to the conflict.
South Korea Moves To Stabilize Markets
Elsewhere in the region, governments also stepped in as oil-driven inflation risks rippled across currencies, bonds and equities. Japan tapped 800 billion yen in reserve funds to keep gasoline prices near 170 yen per litre and considered intervention in crude oil futures. The Philippines held an off-schedule policy review on March 26 and kept its benchmark rate unchanged at 4.25%, while signaling readiness to respond if inflation expectations shifted. Bond yields across major markets remained elevated as traders reassessed interest rate paths.
Friday’s trading underscored how quickly optimism over a diplomatic opening can be offset by persistent conflict risk and energy disruption. Asian equities recovered from their worst levels, but markets still ended the week under pressure as investors balanced official support measures with uncertainty over the conflict and transport through Hormuz. South Korea’s market, after another sharp intraday reversal, became the clearest example of that instability, with losses narrowing but not disappearing by the final bell – By Content Syndication Services.