Sun, Aug 13, 2017 - Page 14 News List

Asian markets shaken by US, N Korea war of words

Bloomberg

The escalating war of words between US President Donald Trump and North Korean leader Kim Jong-un sent Asian markets tumbling as the region braced for more provocations from his regime next week.

Australian Prime Minister Malcolm Turnbull said his nation would back the US if North Korea attacked, while China called on both countries to avoid taking the “old road” of taking turns to escalate tensions.

Meanwhile, Japan moved missile interceptors into place after North Korea threatened to fire rockets at Guam, the Nikkei reported.

“The United States has no stronger ally than Australia,” Turnbull said in a radio interview on Friday. “In terms of defense, we are joined at the hip.”

Trump is ramping up pressure on North Korea, cautioning Kim’s regime against following through on threats to fire missiles near Guam and vowing “fire and fury” if he keeps provoking the US.

On Thursday, the US president doubled down on the rhetoric, saying Kim “should be very nervous” and suggesting the earlier warning did not go far enough.

The saber rattling has shaken global markets, triggering a sell-off in Asia as investors sought safe havens. The MSCI Asia Pacific Index fell 0.5 percent.

The weighted index on the Taiwan Stock Exchange closed down 0.17 points at 10,329.57, falling 1.7 percent from last week’s close of 10,506.56 points.

Hong Kong shares fell 2 percent on Friday, dragged down by a sell-off in Internet-related shares and fears over the impact of rising tensions in the Korean Peninsula.

The Hang Seng index fell 2 percent to 26,883.51, while the China Enterprises Index lost 1.9 percent to 10,572.97 points.

The losses on Friday brought the Hang Seng down 2.5 percent for the week, making for its worst weekly performance this year.

Losses were broad-based, with consumer cyclicals and technology sectors racking up the steepest declines.

“A lot of it has to do with the geopolitical risk between the US and North Korea,” said Mitchell Kim at Maybank Kim Eng in Hong Kong, referring to global market declines. “It’s making a round trip back to Asia.”

Kim said a market correction was due after significant gains this year, and that tensions over North Korea came at a critical moment.

“The timing was kind of a perfect storm in that sense,” he said.

After gaining for the past three weeks and reaching record highs this week, shares in Tencent Holdings Ltd (騰訊) fell 4.9 percent on Friday.

The company’s shares were hit by news that China’s Internet watchdog was investigating Tencent’s WeChat (微信), Weibo Corp (微博) and Baidu Inc’s (百度) forum site Tieba (貼吧) over suspected violations of the country’s strict cybersecurity laws.

In Japan, the TOPIX ended less than 0.1 percent lower, while South Korea’s KOSPI slid 0.4 percent, adding to a 1.1 percent drop on Wednesday.

Australia’s S&P/ASX 200 Index lost 0.1 percent.

Additional reporting by Reuters and CNA, with staff writer

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