Asian Equities Continue Retreat as Korea Tempers Risk Appeal

  • MSCI Asia Pacific Index falls to lowest in nearly two weeks
  • Hong Kong stocks slide most in a month as amid risk aversion

Eurasia Group Says Markets Have Ignored N. Korea Risk

Asian equities fell on Thursday, retreating for a third consecutive session from their almost 10-year intraday high touched on Tuesday, as tensions between Washington and Pyongyang continued to temper risk appetite.

The MSCI Asia Pacific Index fell 0.5 percent to 159.71 as of 4:38 p.m. in Hong Kong, after earlier touching its lowest intraday level since July 28. Two stocks declined for each one that advanced, with financial and technology stocks dropping the most among sub-gauges. Japan’s Topix closed lower for a third day after erasing earlier gains, while Hong Kong’s benchmark capped its biggest loss since July 4.

A "technical correction" might be underway as risk-averse sentiment dominates global equities amid geopolitical tensions, said Margaret Yang a strategist at CMC. "The market still needs to see how President Trump will eventually deal with his advocating ‘fire and fury’ against North Korea’s threat."

American officials tried to ease fears about a possible armed conflict with Kim Jong-Un’s isolated Asian state after President Donald Trump promised “fire and fury” if North Korea keeps issuing threats, with U.S. Secretary of State Rex Tillerson signaling that a military confrontation wasn’t imminent.

"Risk aversion is probably warranted," said James Soutter a fund manager at K2 Asset Management in Melbourne. "I suspect the rhetoric gets worse before it gets better and this clash of egos will no doubt cause a couple of tense moments."

Next on watch is U.S. inflation data, scheduled for Friday, which is expected to take investors’ focus back to Federal Reserve monetary policy.

Summary

  • Topix, Nikkei 225 fall less than 0.1%
    • Japan Stocks Drop as Financial Shares Retreat, Shiseido Surges
    • CyberAgent, Japan Post May Get Added to Nikkei 225: MUFJ-MS
    • All Eyes on Toshiba Auditor as Delisting Risk Seen Lower
  • Hang Seng Index -1.1%, Hang Seng China Enterprises Index -1.7%
  • Kospi -0.4%, Kospi 200 Index -0.4%
  • Shanghai Composite Index -0.4%, Taiwan’s Taiex Index -1.3%
  • Australia’s S&P/ASX 200 Index -0.1%, New Zealand’s NZX 50 -0.1%
  • Straits Times Index +0.2%, FTSE Bursa Malaysia KLCI Index -0.1%, Philippine Stock Exchange PSEi Index -0.3%, Vietnam’s VN Index little change, Jakarta Composite Index -0.1%, Thailand’s SET Index little changed
  • Nifty Index -0.6%, Sensex Index -0.5%
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