Asian markets dip as investors fret over geopolitical tensions

US stocks close lower ahead of Easter holiday weekend

SEOUL, South Korea, April 15, (Agencies): Asian shares fell Friday as investors fretted over rising geopolitical tensions, especially the situation on the Korean Peninsula. Many markets around the world were closed for Good Friday holidays.

Tokyo’s Nikkei 225 lost 0.5 percent to 18,335.63 and South Korea’s Kospi slipped 0.6 percent to 2,134.88. The Shanghai Composite index dropped 0.9 percent to 3,246.07. Markets in Hong Kong, Singapore and other Southeast Asian countries were closed. Markets in Europe and the US were shut for the Good Friday holiday.

Analysts said investors were seeking safe havens on concern North Korea may be planning a nuclear test. As it prepares for the 105th anniversary of the birth of its founder Kim Il Sung on Saturday, North Korean has intensified its rhetoric, warning of strong retaliation against any aggression as US-South Korea hold military exercises.

“Geopolitics seemed to dominate over the past week with the ramifications of the US’ missile strike on Syria still reverberating and tensions around North Korea steadily building,” Shane Oliver, chief economist at AMP Capital, said in a commentary. “The issues around Syria are likely to settle down assuming US involvement does not escalate, but North Korea is more risky.”

US stocks finished lower for the third straight day on Thursday as energy stocks led the decline. The Standard & Poor’s 500 index slid 0.7 percent to 2,328.95. The Dow Jones industrial average fell 0.7 percent to 20,453.25. The Nasdaq composite index lost 0.5 percent to 5,805.15.

OIL: On Friday, the New York Mercantile Exchange and the London Metal Exchange were closed. On Thursday, benchmark US crude rose 7 cents to close at $53.18 per barrel in New York. Brent crude, used to price international oils, added 3 cents to close at $55.89 per barrel in London.

Asia

The Japanese market led Asian bourses lower with investors jittery after the Pentagon announced it dropped the largest non-nuclear bomb ever deployed in combat, targeting an Islamic State complex.

US President Donald Trump called the mission “very, very successful,” but the announcement added to concerns for markets already wary of risks over Syria and North Korea, as well as the outcome of the French presidential election.

“It’s just creating more uncertainty with people,” Frank Ingarra, head trader at US-based NorthCoast Asset Management, told Bloomberg News.

The file photo shows traders at floor of New York Stock Exchange. US stocks were weighted by broad decline in

energy shares on Thursday ahead of long Easter holiday weekend. (AP)

The broader Topix index of all firstsection issues meanwhile fell 0.63 percent, or 9.24 points, to 1,459.07. It was down 2.06 percent over the week.

In other Asian markets, the benchmark Shanghai Composite Index dipped 0.91 percent, or 29.89 points, to 3,246.07.

The Shenzhen Composite Index, which tracks stocks on China’s second exchange, fell 1.39 percent, or 28.02 points, to 1,986.65.

South Korea’s Kospi ended the day 0.64 percent, or 13.73 points, lower at 2,134.88.

Markets in Hong Kong, Singapore, Sydney and Mumbai were closed for a holiday.

The latest US assault came only a week after Trump ordered missile strikes against Syria in retaliation for a suspected chemical attack.

Trump has also said he is keeping “all options” on the table to stop North Korea’s nuclear programme, as speculation mounts that Pyongyang may soon hold another nuclear test.

“Towards the end of trading, reports came that North Korea was further hardening its position,” Okasan Online Securities said in a commentary.

“The reports accelerated (the market’s) fall.”

Geopolitical worries are expected to continue affecting global markets in the coming week, when investors will also see a range of key data released, including Chinese factory production and retail sales as well as January-March GDP figures.

In Tokyo trading, Nintendo jumped 2.06 percent to 25,760 yen, after the videogame giant said it sold over 900,000 units of its new Switch console in North America last month.

Uniqlo operator Fast Retailing rose 1.36 percent to 35,330 after reporting strong earnings Thursday.

Toshiba fell 5.42 percent to 198.7 yen, as Bloomberg News reported the company was temporarily cancelling all meetings tied to the sale of its memory chip business.

Toshiba denied the report, and the stock pared losses in early afternoon trading as Japan’s public broadcaster NHK said Apple was considering investing in the chip division.

In currency markets, the dollar bought 108.91 yen, slipping from 109.14 yen in New York, while the euro was little changed at $1.0616, against $1.0613.

US

Investors were in a selling mood at the end of a mostly subdued week of trading, sending US stocks lower for the third day in a row Thursday.

Energy stocks led the broad decline, which gathered momentum in the final hour of trading ahead of the long Easter holiday weekend. The slide marked the lowest close for the stock market since Feb 13 and came on a day when several major banks reported their latest quarterly results, kicking off the company earnings season.

Traders also weighed the potential for rising geopolitical tensions following news that the US attacked an Islamic State tunnel complex in eastern Afghanistan with the largest non-nuclear weapon ever used in combat by the US military.

Bond yields continued to drop. Gold surged to its highest level since early November. The weakened versus the yen and euro.

“Investors have plenty of reasons to be cautious and have become more cautious in recent weeks,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank. “The market had a great run and it just hasn’t been given a lot of reasons for much follow-through on that.”

The Standard & Poor’s 500 index slid 15.98 points, or 0.7 percent, to 2,328.95. The Dow Jones industrial average fell 138.61 points, or 0.7 percent, to 20,453.25. The Nasdaq composite index lost 31.01 points, or 0.5 percent, to 5,805.15.

Small-company stocks fell more than the rest of the market. The Russell 2000 index lost 13.96 points, or 1 percent, to 1,345.24. More stocks fell than rose on the New York Stock Exchange.

The decline deepened the market’s losses for the month.

Bond prices edged higher. The yield on the benchmark US 10-year note fell to 2.23 percent from 2.24 percent late Wednesday.

Gold, often sought out by investors in times of global uncertainty, climbed $10.40 to $1,288.50 an ounce.

Oil prices inched higher as traders shrugged off a report by the International Energy Agency said that demand growth for oil will slow for a second consecutive year this year.

Benchmark US crude rose 7 cents to close at $53.18 per barrel in New York. Brent crude, used to price international oils, added 3 cents to close at $55.89 per barrel in London.

Even so, energy stocks fell sharply, led by Chesapeake Energy. The stock was the biggest decliner in the S&P 500, shedding 26 cents, or 4.2 percent, to $5.89.

After a week of mostly subdued trading without major new economic data or company news, investors got a look at the first batch of big bank earnings Thursday.