CANBERA (dpa-AFX) - Asian stock markets are mixed on Friday as worries about escalating tensions in the Middle East offset the positive sentiment generated by the overnight gains on Wall Street amid optimism about an interest rate cut by the U.S. Federal Reserve in the future.
Tensions between the U.S. and Iran escalated after Iran shot down a U.S. military drone over the Strait of Hormuz. President Donald Trump declined to say whether the U.S. would retaliate against Iran for the shooting, repeatedly saying to media reporters, 'You'll find out.'
The Australian market is modestly lower. Gains by oil and mining sectors were offset by weakness in banking stocks.
The benchmark S&P/ASX 200 Index is down 18.70 0.28 6668.80, after touching a low of 6,673.70 earlier. The broader All Ordinaries Index is down 14.30 0.21 6753.60. Australian stocks closed higher on Thursday.
In the oil sector, Woodside Petroleum is rising 3 percent, Oil Search is advancing almost 2 percent and Santos is higher by more than 1 percent after crude oil prices spiked amid rising geopolitical tensions in the Middle East.
In the mining space, Fortescue Metals is advancing more than 1 percent, BHP Group is adding almost 1 percent and Rio Tinto is up 0.5 percent.
The big four banks - ANZ Banking, Westpac, Commonwealth Bank and National Australia Bank - are lower in a range of 0.2 percent to 0.7 percent.
Gold miners are mixed despite a surge in gold prices overnight. Newcrest Mining is rising more than 1 percent, while Evolution Mining is lower by 0.5 percent.
Domino's Pizza Enterprises has denied that Andrew Rennie, the chief executive of its European operations, will quit to lead the Domino's master franchise for the UK and Ireland. The company's shares are higher by 0.3 percent.
In the currency market, the Australian dollar is higher against the U.S dollar on Friday. The local currency was quoted at $0.6925, up from $0.6905 on Thursday.
The Japanese market is flat in choppy trading, while the safe-haven yen strengthened amid worries about escalating tensions in the Middle East.
The benchmark Nikkei 225 Index is down 6.12 points or 0.03 percent to 21,456.74, after touching a high of 21,497.82 in early trades. Japanese shares hit fresh six-week highs on Thursday.
Market heavyweight SoftBank is declining 0.4 percent and Fast Retailing is lower by 0.5 percent.
In the auto space, Honda Motor is rising 0.3 percent, while Toyota Motor is down 0.2 percent.
The major exporters are mostly higher despite a stronger yen. Mitsubishi Electric is advancing more than 1 percent, Canon is higher by almost 1 percent and Panasonic is up 0.6 percent, while Sony is edging down 0.1 percent.
Among tech stocks, Advantest is rising 0.7 percent and Tokyo Electron is higher by more than 1 percent each. In the oil sector, Japan Petroleum is gaining almost 4 percent and Inpex is rising more than 3 percent after crude oil prices jumped overnight.
Among banks, Sumitomo Mitsui Financial is lower by 0.7 percent and Mitsubishi UFJ Financial is down 0.5 percent.
Among the other major gainers, Idemitsu Kosan is rising more than 4 percent, Kawasaki Kisen Kaisha is higher by more than 3 percent and Mitsui E&S Holdings is advancing 3 percent.
On the flip side, Isetan Mitsukoshi is losing almost 6 percent, Shiseido Co. is lower by almost 5 percent and Daiwa House Industry is declining more than 3 percent.
On the economic front, the Ministry of Communications and Internal Affairs said that overall consumer prices in Japan were up 0.7 percent on year in May. That was in line with expectations and down from 0.9 percent in April.
Japan also will see May numbers for department store sales and preliminary June data for the manufacturing PMI from Nikkei.
In the currency market, the U.S. dollar is trading in the lower 107 yen-range on Friday.
Elsewhere in Asia, South Korea, Singapore, Indonesia and Hong Kong are also modestly lower, while Shanghai, New Zealand, Malaysia and Taiwan are moderately higher.
On Wall Street, stocks closed higher on Thursday despite giving back some ground in mid-day trading after Iran shot down an unmanned U.S. surveillance drone. Trump later suggested the downing of the drone may have been unintentional but still refused to say whether the U.S. would retaliate, repeatedly saying, 'You'll find out.'
The Dow jumped 249.17 points or 0.9 percent to 26,753.17, the Nasdaq climbed 64.02 points or 0.8 percent to 8,051.34 and the S&P 500 surged up 27.72 points or 1 percent to 2,954.18.
The major European markets also moved to the upside on Thursday. While the German DAX Index climbed by 0.4 percent, the U.K.'s FTSE 100 Index and the French CAC 40 Index both rose by 0.3 percent.
Crude oil prices rose steeply on Thursday following an escalation in geopolitical tensions after Iran shot down a U.S. military drone over the Strait of Hormuz. WTI crude for July delivery spiked $2.89 or 5.4 percent to $56.65 a barrel on expiration day.
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