Asian stocks retreated, after the regional benchmark index closed Tuesday at the highest level since January, as deadly terrorist attacks in Brussels weighed on sentiment. Industrial and materials shares led declines.
The MSCI Asia Pacific Index fell 0.7 percent to 128.87 as of 4:01 p.m. in Hong Kong. Two bombs went off in rapid succession at the Brussels airport and an explosion an hour later hit a subway station a short walk from the EU’s headquarters. Terrorist incidents including the one in Paris last November as well as the London bombings in 2005 spurred equity selloffs that were erased in the following days and weeks.
“This is a reflection of broader geopolitical risks out there,” Chris Green, an Auckland-based strategist at First NZ Capital Group Ltd., a brokerage and wealth management firm, said by phone. “Usually such attacks will have only a short-term impact. Investors’ focus remains on macro economic fundamentals and we do need to see more signs of sustainability in the U.S. economy and some stability in the Chinese data. I’m somewhat cautious given the recent rally we’ve seen.”
Japan’s Topix index slipped 0.4 percent, erasing a gain of 0.6 percent early in the day. South Korea’s Kospi index dropped 0.1 percent. Taiwan’s Taiex index lost 0.2 percent. Singapore’s Straits Times Index fell 0.1 percent. Hong Kong’s Hang Seng Index dropped 0.3 percent. Australia’s S&P/ASX 200 Index declined 0.5 percent. New Zealand’s S&P/NZX 50 Index added 0.1 percent.
Rates on Hold
The Philippine Stock Exchange Index climbed 0.3 percent, after erasing a drop of 1.1 percent. The nation’s central bank left its key benchmark interest rate unchanged a 12th straight meeting, as an anticipated boost to the economy from a May election allows policy makers to resist joining a wave of monetary easing.
Thailand’s SET Index gained 0.1 percent as policy makers kept rates unchanged for a seventh straight meeting amid expectations the country will soon see benefits of stimulus measures introduced by the military government.
China’s Shanghai Composite Index jumped 0.4 percent, after sliding 0.6 percent earlier, as technology shares rose and a revival in margin lending underpinned demand for riskier shares. The small-cap ChiNext index advanced 20 percent from a February low, the threshold for a bull market.
The Shanghai measure clawed back 13 percent from a January low amid signs of state-fund buying during this month’s National People’s Congress and as policy makers loosened controls on margin lending. The rebound may last for one or two months as economic data has stabilized in the short term, according to Credit Suisse Group AG.
Airlines from Air China Ltd. to Korean Air Lines Co. slid at least 1.3 percent following the deadly terror attacks in Brussels. Inpex Corp. fell 1.3 percent in Tokyo, pacing losses among the region’s energy producers after crude oil futures retreated. Iluka Resources Ltd. slumped 8.1 percent in Sydney after Deutsche Bank AG cut its rating on the world’s biggest zircon producer to sell. Inventec Corp. sank 8.8 percent in Taipei after the maker of personal computers posted a decline in full-year profit.
E-mini futures on the Standard & Poor’s 500 Index lost less than 0.1 percent on Wednesday. The U.S. equity benchmark index slipped 0.1 percent on Tuesday. Most U.S. stocks retreated as investors dived into haven assets including gold and the dollar after the terrorist attacks in Brussels. The Stoxx Europe 600 Index pared a drop of as much as 1.6 percent Tuesday to close down 0.2 percent.
Europe’s leaders pledged a united front against Islamic State after the bomb attacks that killed at least 31 people in Brussels, but the jihadist group’s latest and powerfully symbolic strike may only widen the continent’s divisions.