Shares in Asia and Europe steadied yesterday from a sell-off following North Korea’s deadly shelling of a South Korean island, but tension on the divided peninsula supported safe-haven assets such as gold and Japanese government bonds.
The euro clawed away from a two-month low, but remained on the back foot amid concerns that a rescue package for Ireland would not be enough to stop a debt crisis from picking off more of the eurozone’s most heavily indebted nations.
European stock markets rose from a six-week closing low, with the FTSEurofirst 300 up 0.4 percent in early trade. London’s FTSE 100 rose 0.7 percent, Germany’s DAX 0.5 percent and France’s CAC 40 0.6 percent.
While Tuesday’s artillery attack was one of the most serious incidents on the peninsula since the end of the Korean War in 1953, market reactions to North Korean saber-rattling or outright aggression have tended to be short-lived.
The Korean won recouped most of its early losses to finish down around 0.5 percent on the day and South Korean stock and bond futures rose, indicating longer term investors saw a chance to snap up bargains.
Seoul’s benchmark index finished down only 0.2 percent, off earlier lows, with foreign investors net buyers of stocks.
“Korea trades at a discount to the region on a valuation basis ... If you look back at the last five years when we’ve had scares, they were all seen as buying opportunities,” said Todd Martin, Asia equity strategist with Societe Generale. “The rule among hedge funds and long-only funds is that you let the market sell off and watch for your entry point.”
Japan’s Nikkei share average fell 0.8 percent, retreating from a five-month high and catching up with regional markets after a break for a public holiday on Tuesday.
MSCI’s broadest index of Asia Pacific shares outside Japan was flat, with gains in Hong Kong, Shanghai and Singapore offsetting falls in Australia and South Korea.
Japanese government bond futures bounced from a two-month low, with the 10-year benchmark up 0.14 point.
“Tensions in Korea are debt-positive in the short-run, spurring investors away from riskier assets,” said Koichi Ono, a senior strategist at Daiwa Securities Capital Markets.
Currency markets remained more focused on Europe, where Ireland’s beleaguered coalition was due later in the day to set out a four-year plan to save 15 billion euros (US$20 billion) through spending cuts and tax increases.
Now investors fear a debt crisis that had already swamped Greece will spread further. The premium on Spanish government bond yields over German benchmarks rose to a euro lifetime high on Tuesday.
“Perhaps the market may be already expecting Portugal to ask for some sort of help. But if Spain also needs a rescue, that would be a big blow to the euro,” said Ayako Sera, market strategist at Sumotomo Trust and Banking.
The euro slumped 1.9 percent on Tuesday to as low as US$1.3359 and was trading around US$1.3390 yesterday. A downgrade for Ireland from ratings agency Standard and Poor’s did not dent the euro further, indicating it may have found support for now.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last