Asian Stocks Fall Amid Escalating U.S., North Korea Tension

  • Trump’s ‘fire and fury’ threat invites profit taking
  • Asian shares head for the sharpest decline in a month

Eurasia Group Says Markets Have Ignored N. Korea Risk

Asian equities fell, driving the region’s benchmark index to its biggest loss in a month, on rising geopolitical risk after President Donald Trump warned the U.S. will retaliate against North Korea.

The MSCI Asia Pacific Index slid 0.4 percent to 160.57 as of 3:41 p.m. in Hong Kong as more than two stocks declined for each that advanced. Japan and South Korea equities led the slide as Trump said further threats from North Korea, which was reported by The Washington Post to have developed a miniaturized nuclear warhead that could fit onto its missiles, would be met with “fire and fury.”

“A war is still far from erupting but given recent gains and pricey valuation, prudence suggests it’s best to capitalize on the rising geopolitical tension by taking some money off the table," said Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc. “Investors have a good excuse to stay on the sidelines."

Japan’s Topix index posted its biggest slide since May 18, weighed down by exporters, as the yen strengthened. South Korea’s benchmark equities gauge fell for a second day, dragged by Samsung Electronics Co. and SK Hynix Inc., which both lost more than 3 percent.

The broad decline in Asian equities also reflects concerns over liquidity ahead of central banks’ tapering announcements that could come in September, according to Ken Peng, a Hong Kong-based investment strategist at Citi Private Bank.

The MSCI Asia Pacific Index has rallied 19 percent so far this year, last week posting its highest close since 2007 amid strong earnings from some of the region’s key companies and optimism U.S. interest rate increases will remain gradual. The rally has pushed stock valuations to a two-year high.

Summary

  • Topix -1.1%, Nikkei 225 -1.3%
    • Flaring North Korea Tensions Send Topix Lower as Yen Strengthens
    • Yamaha Motor Rises Most in 6 Months After Lifting Forecasts
    • Sumco Slides After Forecast Miss, Capacity Expansion Plan
  • Hang Seng Index -0.3%, Hang Seng China Enterprises Index -0.9%
    • Hong Kong Stocks Join Slide as U.S.-North Korea Tensions Mount
    • SMIC Falls Most in Nearly 2 Years as Earnings Miss Estimates
    • Hong Kong Stock-Valuation Rocket Might Still Have a Booster Left
  • Kospi -1.1%, Kospi 200 Index -1.2%
  • Shanghai Composite Index -0.2%, Taiwan’s Taiex Index -0.9%
    • China Consumer Index Soars to Record on Signs of Retail Strength
    • China Builders, Healthcare Stocks Surge After Quake in Sichuan
    • Guizhou Transportation Jump by Daily Limit in Trading Debut
  • India’s Sensex -0.4%, 3rd straight day of declines
  • Australia’s S&P/ASX 200 Index +0.4%, New Zealand’s NZX 50 +0.2%
  • FTSE Bursa Malaysia KLCI Index -0.2%, Philippine Stock Exchange Index little changed, Jakarta Composite Index -0.2%, Thailand’s SET Index -0.2%, Vietnam’s VN Index -1.6%, Singapore closed for a holiday
    • Srivichai Leads Thai Hospital Stock Slide After Profit Decline
    • Ciputra Leads Developer Stock Rally as Deutsche Sees Rate Cut
    • Chelsea Falls in Second Day of Trading as ‘Weak Hands’ Sell Out
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