Asian equity markets experienced a decline on Friday because they followed the Wall Street sell-off from the previous night which created negative investor mood after global technology stocks showed weakness. The regional indices showed positive performance because they would achieve solid January gains which followed earlier market rallies.

Asian market sentiment followed U.S. market trends because Wall Street closed with losses. The S&P 500 and Nasdaq both suffered losses after Microsoft stock dropped almost 10 percent because investors began to doubt the company’s ability to grow its cloud business and its major artificial intelligence projects. The U.S. stock index futures market showed a small decrease during the Asian trading hours.

China, Hong Kong Lead Regional Declines

Chinese equities led the regional market downturns. The Shanghai Composite index and the blue-chip CSI 300 index both dropped more than 1 percent while Hong Kongs Hang Seng index experienced a nearly 2 percent decline. The Hang Seng Tech index faced significant losses because technology stocks encountered selling pressure. Hong Kong shares still maintained their ability to achieve monthly gains exceeding 7 percent despite the market decline.

The Straits Times Index of Singapore experienced a minor decline after reaching a record high during the session and was projected to increase by approximately 6 percent in January. The S&P/ASX 200 index of Australia declined by approximately 0.6 percent yet it continued to progress toward a monthly increase approaching 2 percent.

Futures linked to India’s Nifty 50 pointed to a weaker open, slipping around 0.3 percent.

South Korea Outperforms on Chip Strength

South Korean stocks showed a different performance than the regional pattern. The KOSPI increased by approximately 0.5 percent because major chip companies SK Hynix and Samsung Electronics reported strong earnings results. The benchmark index was expected to achieve an extraordinary monthly increase which would reach almost 25 percent.

Japan Markets Dip as Tokyo Inflation Eases

In Japan, the Nikkei 225 index decreased by approximately 0.4 percent while the TOPIX index showed a loss of about 0.3 percent. The Nikkei index for the day maintained its upward trend which resulted in a more than 5 percent increase for the month of January but the yen appreciation restricted some of these gains.

The most recent consumer price information from Tokyo revealed that inflation in the city reached its lowest point in almost four years which indicates decreasing price inflation rates. The core inflation rate which excludes fresh food products continued to exceed the Bank of Japan’s 2 percent target. The BOJ maintained its focus on future policy rate increases.

Asian markets encountered temporary declines because of global risk aversion and profit-taking activities yet most benchmarks still showed strong performance for the month.