The uncertainty in Iran's situation continues, leading to a decline in Asian stock markets; South Korea suffers heavy losses due to chip stock declines.

Investing.com - On Friday, Asian stock markets declined in narrow fluctuations. Despite the easing brought by U.S. President Donald Trump postponing military action against Iran, concerns over a prolonged conflict continued to weigh on regional markets.

The South Korean stock market was the worst performer of the day, dragged down by a continuous decline in chip stocks amid worries about the impact of new compression algorithms on artificial intelligence memory demand.

Asian markets continued the weak trend from Wall Street, where U.S. stocks fell sharply on Thursday due to heightened uncertainty surrounding the Iran conflict, especially after Tehran ruled out the possibility of direct negotiations with Washington.

However, after 10:17 PM Eastern Time (10:17 AM Beijing Time), S&P 500 futures rose 0.3% as Trump delayed the deadline for attacking Iran’s critical energy infrastructure by more than a week and stated that negotiations with Tehran were making progress.

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Asian markets also narrowed some of their earlier losses.

KOSPI index in South Korea plummets 3%, memory chip stocks continue to decline

The KOSPI index in South Korea remains the worst-performing market in Asia, affected by the decline of local chip manufacturing stocks, dropping as much as 3%.

Memory chip manufacturers Samsung Electronics (KS:005930) and SK Hynix (KS:000660) fell 4% and 4.5%, respectively, continuing their downward trend amid ongoing concerns regarding AI-driven chip demand.

These two stocks followed the overnight declines of their U.S. counterparts, after Alphabet’s Google unveiled a new compression algorithm—TurboQuant—earlier this week.

Google researchers stated that the algorithm could significantly reduce the working memory requirements for AI programs, leading analysts to believe that this trend may harm long-term demand for memory chips.

Samsung and SK Hynix have fallen 13.2% and 11% this week, respectively. This positions the KOSPI index to decline by 8.1% this week, making it the worst-performing market in the Asia region.

Asian stock markets hesitant, Iranian tensions drag weekly performance lower

On Friday, Asian stock markets overall declined in narrow fluctuations, with most regional markets trending downward this week, as the uncertainty surrounding the Iran conflict showed little signs of easing.

Japan’s Nikkei 225 index and TOPIX index fell 0.8% and 0.3%, respectively, with the Nikkei index down 0.3% this week.

China’s CSI 300 index and Shanghai Composite Index saw slight gains on Friday but are down approximately 1.7% and 1.5% this week, respectively. The Hong Kong Hang Seng Index rose 0.2% but is down 1.4% this week.

Australia’s ASX 200 index fell 0.4%, but recorded moderate gains this week, particularly as local energy stocks benefited from rising oil prices. Singapore’s Straits Times Index rose 0.3% on Friday but saw a slight decline for the week.

India’s Nifty 50 index futures rose 0.4%, with the index up 0.8% this week after experiencing deep declines for four consecutive weeks.

The market has seen significant volatility this week due to the U.S.-Israel conflict with Iran sending out numerous conflicting signals. The U.S. claims progress in negotiations, but Iran largely denies this, although the country has indicated it is reviewing Washington’s 15-point ceasefire proposal.

Trump stated on Thursday evening that he would extend the deadline for the U.S. to strike Iran’s energy infrastructure by 10 days and mentioned some progress in negotiations to end the conflict.

However, there are almost no signs of easing hostilities in the Middle East, with reports indicating that attacks between Iran and neighboring Middle Eastern countries continued early Friday morning.

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