Asian Stocks Fall for a Second Day as Traders Assess War Risk

Updated on
  • Caixin China composite PMI rose to highest since February
  • First Shanghai strategist Yip sees profit-taking in near term

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Asian shares fell, posting a second consecutive day of declines, after North Korea’s nuclear test on Sunday rattled global equity markets.

The MSCI Asia Pacific Index fell 0.1 percent to 160.04 as of 4:31 p.m. in Hong Kong. For every two stocks that dropped, one rose. Japan’s Topix slid 0.8 percent as declines in telecommunication companies’ shares offset automakers’ gains. Hong Kong’s Hang Seng Index closed less than 0.1 percent higher, snapping a three-day losing streak.

Asian investors are gauging geopolitical tensions and room for further equity gains following a world-leading rally. The region’s benchmark has surged about 19 percent this year, outpacing an 11 percent gain for the S&P 500 Index.

"Geopolitical risks are prompting investors to take profits after an impressive rally this year," said Linus Yip, Hong Kong-based strategist at First Shanghai Securities. "While a war looks unlikely, profit-taking limits the short-term upside."

U.S. President Donald Trump agreed to support billions of dollars in new weapons sales to South Korea after North Korea’s largest nuclear test. The U.S. ambassador to the United Nations said North Korea was "begging for war" at a UN Security Council meeting.

China’s August composite purchasing managers’ index rose to 52.4, the highest since February, according to data released today by Caixin Media and Markit Economics.

Hana Financial Group Inc. dropped 5.6 percent in Seoul, its biggest decline in more than a year, while Sharp Corp. slumped 5.9 percent to a seven-month low in Tokyo.

Semiconductor Manufacturing International Corp. surged 12 percent in Hong Kong, the most since November 2015. Sunac China Holdings Ltd. jumped 7.7 percent to a record high after Morgan Stanley raised target prices.

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