Most Asian stock markets were set for sharp weekly drops even as they gained on Friday, as concerns over inflation and economic growth dented investor sentiment, while currency markets traded mixed.

Investors this week have been largely guided by global growth concerns, leading to an outflow of capital from equity markets around the world, with U.S. inflation data late on Wednesday failing to provide any relief.

Indonesian stocks, up 0.1% on Friday, were set to be the worst performer in Asia this week, on course to post their sharpest weekly drop since March 2020, down 8.6% so far.

The main index has fallen more than 10% from this year's high in April, putting the Indonesian market in correction territory.

Nearly all other stock markets in the region were poised to decline sharply for the week. Singapore stocks, up 1.1%, fell 2.8% for the week. Indian stocks, which gained 1.5%, were down 2.2% for the week so far. "Overall, sentiments seem to be seeing some slight reprieve in the Asia session after its recent sell-off, but markets may need a relief catalyst for a more sustaining upside," said IG market strategist Yeap Jun Rong.

China stocks defied the broader Asia trend to gain for the week due to the improving COVID-19 situation in the country and promises of economic stimulus from the government.

Malaysia reported its economy expanded 5% in the first quarter of the year to top analyst estimates as economic activity accelerated after pandemic restrictions were lifted.

Analysts at Barclays raised their annual economic growth forecast for Malaysia to 7%, above the central bank's growth outlook of 5.3% to 6.3%.

Currency markets were mixed but the South Korean won rose 0.4%, while stocks gained more than 2%.

The Indian rupee added 0.1%, a day after the country's central bank likely sold $700 million, according to traders, seeking to lift the currency off its second record low this week.

India's annual retail inflation exceeded market expectations to soar 7.79% in April, data showed, staying above the central bank's tolerance range of 2%-6% for a fourth consecutive month.

Data also showed the country's industrial output grew 1.9% in March, higher than what analysts had expected.

Analysts at BofA Global Research, ING, DBS and Maybank have begun raising bets on the future course of rate hikes from the Indian central bank, after it raised benchmark lending rate by 40 basis points in a surprise off-cycle move last week.

(Reporting by Harshita Swaminathan; Editing by Vinay Dwivedi)