KOSPI was the worst performer in Asia on Friday, dropping as much as 2% from recent record highs on some declines in tech

Most Asian stocks dropped on Friday, although bourses in South Korea and Japan were headed for strong gains in February.

Australia was also set for a strong month, while most other bourses were nursing a mixed performance in February.

KOSPI was the worst performer in Asia on Friday, dropping as much as 2% from recent record highs on some declines in tech. Chipmaking majors Samsung Electronics Co Ltd and SK Hynix Inc shed 0.9% and 2.6%, respectively, also dropping from record highs.

But index heavyweight Hyundai Motor was an exception, rising 2.5% to a record high after it agreed to invest around $6.26 billion in an artificial intelligence data centre and robot factory in the country.

The KOSPI has been a major beneficiary of AI-linked hype, with a bulk of its tech and industrial constituents viewed as potential winners from the nascent technology. The index was set to rise almost 20% this month and was by far the best performer in Asia.

Nikkei 225 index dropped 0.2% on losses in tech shares, while the broader TOPIX index climbed 0.8%.

Consumer price index data from Tokyo showed inflation in Japan’s capital cooled in February, with core inflation also dropping below the Bank of Japan’s 2% annual target.

The print usually acts as a bellwether for national inflation, with Friday’s data pointing to more potential reassessments of the BOJ’s plans for rate hikes.

This notion boosted domestically exposed stocks, especially as Prime Minister Sanae Takaichi prepares to dole out more fiscal stimulus.

Expectations of more fiscal support were a key driver of Japanese stock gains in February, with the Nikkei trading up nearly 10% for the month.

Broader Asian markets were mixed on Friday. ASX 200 was flat and was headed for a 3.3% gain in February, having hit a series of record highs on gains in mining and bank stocks.

Shanghai Shenzhen CSI 300 dropped 0.5%, while the Shanghai Composite index was flat, with both indexes having clocked a muted performance in February.

Hang Seng index gained 0.7% on Friday, with internet major Baidu rising 1% even as its fourth quarter earnings largely underwhelmed.

The Hang Seng was trading down about 3.2% in February, hit by losses in technology shares as markets feared increased disruption from AI.