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(RTTNews) - Asian stocks declined on Friday as renewed hostilities between the U.S. and Iran lifted crude oil prices and revived inflation worries.
The U.S. and Iran traded fire in the Strait of Hormuz and accused each other of carrying out attacks in the sharpest confrontation since the fragile U.S.-Iran ceasefire came into effect on April 7.
Iran reportedly activated its air defense systems, intensifying fears of a broader military crisis in the region.
U.S. President Donald Trump insisted that the ceasefire remained in effect but warned of harsher military action if no deal is signed quickly.
Traders also looked ahead to the release of the U.S. non-farm payrolls report later in the day for directional cues after private sector job growth soared in April.
Analysts expect an increase of 62,000 jobs in the month, down from 178,000 in March, while the unemployment is seen holding steady at 4.3 percent.
Gold traded higher above $4,700 an ounce in Asian trading as the dollar index struggled around the 98 mark.
Brent crude futures climbed toward $101 a barrel as fresh U.S.-Iran tensions threatened to derail diplomatic efforts to end the conflict.
China's Shanghai Composite index finished marginally lower at 4,179.95 ahead of the Trump-Xi summit next week in Beijing.
Hong Kong's Hang Seng index dropped 0.87 percent to 26,393.71 ahead of earnings from Alibaba and Tencent due next week.
Japanese markets ended lower due to profit-taking after a record week. The Nikkei average dipped 0.19 percent to 62,713.65 after hitting a record high on Thursday. The broader Topix index ended 0.29 percent lower at 3,829.48.
Technology giant SoftBank Group plunged 4.6 percent after rallying 18 percent in the previous session. Toyota Motor lost 2.2 percent after the automaker announced a significant decline in its operating profit for the fourth fiscal quarter.
The yen was moderately higher against the dollar on intervention fears and expectations of a hawkish shift at the Bank of Japan ahead of U.S. Treasury Secretary Scott Bessent's visit to Tokyo next week.
Seoul stocks recovered from an early slide to end slightly higher, extending gains for a fourth consecutive session, led by auto and robotics stocks. The Kospi average inched up 0.11 percent to 7,498, marking another record closing high.
Australian stocks tumbled as renewed Mideast tensions curbed investors' appetite for riskier assets. The benchmark S&P/ASX 200 fell 1.51 percent to 8,744.40 while the broader All Ordinaries index settled 1.39 percent lower at 8,980.50.
Tabcorp Holdings slumped 14.2 percent amid money-laundering probes. Macquarie Group fell 1.1 percent despite the investment bank reporting its second-biggest annual profit.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index ended down 0.72 percent at 13,175.13 as uncertainty grew over a peace deal in the Middle East.
Overnight, U.S. stocks fell from record highs as investors waited for more tangible results from U.S.-Iran negotiations to end the war and reopen the Strait of Hormuz.
The Dow dipped 0.6 percent, the S&P 500 gave up 0.4 percent and the tech-heavy Nasdaq Composite slipped 0.1 percent after CNN reported that Iran is attempting to force shippers to comply with a new protocol for transiting the Strait of Hormuz.
In economic news, new employment claims saw a small increase last week but remained relatively low.
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