Asian Shares Mostly Lower After Mixed China Data; Nikkei Extends Rally

(RTTNews) - Asian stocks ended mostly lower on Friday as strong U.S. inflation data dented hopes of an early cut in interest rates and oil prices jumped amid signs of an escalating conflict in the Red Sea region.

Crude prices jumped more than 2 percent in Asian trade after Iran's navy captured an oil tanker in the Gulf of Oman and heavy U.S. and British air strikes pounded targets in Yemen, adding to concerns over potential supply disruptions in the Red Sea.

The dollar held steady against peers while gold edged up slightly after falling to a one-month low the previous day on diminished hopes for an interest rate cut in March. Chinese and Hong Kong markets fluctuated before finishing slightly lower as investors digested mixed economic readings and braced for the tense weekend elections in Taiwan.

China's exports grew slightly for a second consecutive month in December even as deflationary pressures continued, a slew of data showed earlier in the day.

China's Shanghai Composite index eased 0.16 percent to 2,881.98 while Hong Kong's Hang Seng index dropped 0.35 percent to 16,244.58.

Japanese markets extended their recent rally to log a fresh 34-year high amid expectations that the Bank of Japan will delay its plan to pivot away from its ultra-dovish stance in the wake of the recent devastating earthquake.

The Nikkei average jumped 1.50 percent to 35,577.11, reaching its highest level since February 1990. The broader Topix index settled 0.46 percent higher at 2,494.23, its highest level since March 1990.

Heavyweight Fast Retailing, which operates the Uniqlo clothing chain, soared 6.3 percent after reporting a 25 percent jump in first-quarter operating profit. Japan Petroleum and Inpex climbed 2-3 percent as the oil price rally continued amid tight supply outlook.

Seoul stocks fell notably to extend losses for the eighth consecutive session on weaker-than-expected corporate earnings. The Kospi average slid 0.60 percent to 2,525.05. Chipmaker SK Hynix dropped 1.4 percent and drug maker Celltrion lost 4 percent.

Australian markets ended slightly lower as consumer discretionary stocks fell amid mounting pressure for a federal government inquiry into rising grocery prices. Coles fell 2.1 percent and Woolworths declined 1.5 percent.

Gains in the energy stocks helped limit the downside in the broader market. Santos rose 1.5 percent and Beach Energy added 2.9 percent.

The benchmark S&P ASX 200 edged down 0.10 percent to 7,498.30 while the broader All Ordinaries index ended little changed with a negative bias at 7,730.50.

Across the Tasman, New Zealand's benchmark S&P NZX-50 index rose 0.47 percent to 11,858.31.

U.S. stocks climbed well off their worst levels of the day to end narrowly mixed overnight as hotter-than-expected inflation data dented rate cut hopes.

The CPI reading accelerated to 3.4 per cent year-on-year in December from 3.1 percent the previous month while the core inflation rate slowed to 3.9 percent from 4.0 percent.

Federal Reserve Bank of Cleveland President Loretta Mester said in an interview that it was premature to consider cutting interest rates as soon as March.

Richmond Fed President Thomas Barkin said that the latest data did little to clarify the path of inflation.