BEIJING (dpa-AFX) - Asian stocks ended mostly lower in thin trade on Friday, with Japanese markets closed for a holiday.
A cautious undertone prevailed as strikes targeting infrastructure in Iran, Qatar and Saudi Arabia stoked concerns of a prolonged economic impact from the war.
Regional losses, however, remained capped after Israel said it will no longer target energy infrastructure.
Seven U.S. allies have offered support for a potential coalition to reopen the strait of Hormuz for commercial ships and oil tankers.
Also, media reports suggested that the U.S. is weighing lifting sanctions on some Iranian oil to increase supply and bring down prices.
U.S. President Donald Trump told reporters he's 'not putting troops anywhere' after being asked about the possibility of sending more service members to the region.
The dollar slipped in Asian trade and faced a weekly loss as bonds remained under pressure.
Oil prices were subdued on easing supply concerns while gold traded up nearly 1 percent below $4,700 an ounce after falling for a seventh session to their lowest level in two months in the previous session.
China's Shanghai Composite index tumbled 1.24 percent to 3,957.05 as the People's Bank of China left benchmark lending loan prime rates unchanged for the 10th consecutive month, in line with market expectations.
Hong Kong's Hang Seng index fell 0.88 percent to 25,277.32 on concerns that a prolonged West Asia conflict will keep inflation higher for longer and weigh on global growth.
Major technology names weakened, with Alibaba tumbling 6.3 percent following its earnings announcement.
Seoul stocks eked out modest gains as oil prices stabilized after the latest remarks by U.S. and Israeli officials. The Kospi index edged up by 0.31 percent to 5,781.20.
Power plant manufacturer Doosan Enerbility surged 3.1 percent, trading firm Samsung C&T advanced 2.2 percent and battery maker LG Energy Solution added 1.2 percent.
Australian markets fell notably as yields on government bonds climbed amid bets on higher interest rates.
The benchmark S&P/ASX 200 fell 0.82 percent to 8,428.40, with banks, resource and consumer discretionary stocks leading losses. The broader All Ordinaries index settled 0.72 percent lower at 8,628.30.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index dropped 0.47 percent to 12,989.99, extending losses from the previous session and notching its lowest level since early September.
U.S. stocks ended modestly lower overnight, trimming earlier losses as an early spike in crude oil prices eased on comments by Israeli Prime Minister Benjamin Netanyahu that the country had acted alone in hitting the South Pars field, and that U.S. President Trump had asked him to hold off on such attacks in the future.
He also said that Iran has no capacity to enrich uranium or make ballistic missiles after 20 days of war, adding his country would help the U.S. reopen the Strait of Hormuz.
Economic reports painted a mixed picture, with sales of new U.S. single-family homes falling more than expected in January to the lowest level in nearly 3-1/2 years, while weekly jobless claims signaled a stable labor market.
The World Trade Organization has downgraded its outlook for global trade and economic growth as the Middle East conflict lifts energy risks. The International Monetary Fund (IMF) has flagged rising risks to global inflation and economic output.
The tech-heavy Nasdaq Composite and the S&P 500 both fell by 0.3 percent while the Dow dipped 0.4 percent.
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