Asian shares stumble as N.Korea fires missile into Japanese waters
SINGAPORE: Asian shares turned lower yesterday as earlier gains were quashed by tensions on the Korean peninsula after North Korea fired a missile that landed in Japanese waters, deepening concerns over the isolated nation’s nuclear capabilities.
European shares were also set to open in the red, with financial spreadbetters expecting Britain’s FTSE 100 and Germany’s DAX to start off 0.2 per cent each, and France’s CAC 40 down 0.3 per cent.
MSCI’s broadest index of AsiaPacific shares outside Japan fell 0.6 per cent after rising earlier.
Japan’s Nikkei also surrendered earlier gains to drop 0.1 per cent, and South Korea’s KOSPI extended losses to trade 0.6 per cent lower.
North Korea test-launched an intermediate-range ballistic missile on Tuesday, South Korean and US officials said, days before leaders from the Group of 20 nations are due to discuss steps to rein in Pyongyang’s weapons programmes.
The missile flew 930 kilometres (580 miles) before landing in Japan’s Exclusive Economic Zone, the South Korean military and Japanese government said.
Tokyo strongly protested what it called a clear violation of UN resolutions, and Japanese Prime Minister Shinzo Abe said he will ask the presidents of China and Russia to play more constructive roles in efforts to stop Pyongyang’s arms programme.
North Korea said it will make a major announcement on Tuesday at 3:30 pm local time (0630 GMT), South Korea’s Yonhap news agency reported.
The South Korean won dropped 0.4 per cent to 1,151 won to the dollar as of 0532 GMT.
The nervous mood pushed the safe-haven yen up 0.4 per cent to 113.02 yen per dollar.
“As concerns surrounding the firing of ballistic missiles brewed midday, we are seeing the slide in the Japanese market spreading across to the rest of Asia,” said Jingyi Pan, market strategist at IG in Singapore.
“Reports suggesting that the missile had landed in Japan’s Exclusive Economic Zone certainly bring about deeper concern compared to past instances.”
Hong Kong’s Hang Seng posted the biggest loss with a 1.6 per cent drop, after earlier slumping more than 2 per cent.
Chinese blue-chips fell 0.9 per cent.
Australian shares bucked the trend to surge 1.6 per cent, bouncing solidly from a 2.3 per cent loss over the previous two sessions, helped by the nation’s central bank steering a neutral course on rates in contrast to some of its peers who have recently turned more hawkish.
The broad Asian share market performance was in stark contrast to the overnight increases in European and US shares, with oil’s longest stretch of daily price gains in over five years boosting energy shares. — Reuters