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Asian markets unfazed by bombings

Asian stock markets remained calm yesterday after the deadly bombings in London, with investors viewing the attacks as a one-off, although most bourses ebbed on local issues or technical trading.

The British pound softened only slightly in Asian trade after taking a beating in Europe following the series of blasts that rattled London transport during the morning rush hour.

Much like previous tragedies such as the Indian Ocean tsunamis, the view was that however tragic the attacks in London, they caused no major infrastructure damage and as long as they remained an isolated incident, investor confidence would remain reasonably solid.

"It's almost disappointing or a worry that we seem to have become so blase" about terrorism, Goldman Sachs JB Were institutional adviser Joe Gallagher said in New Zealand.

Japan's benchmark NIKKEI-225 index gave up early gains to close 0.21 percent lower yesterday. Investors who had banked on a bigger fallout from the attacks breathed some relief, only to see sentiment undercut by far weaker-than-expected machinery orders data.

"Just after the blast news came in, Japanese institutional investors hedged massively in the stock futures, anticipating a fall," said Norihiro Fujito, a senior investment strategist at Mitsubishi Securities.

"But this morning, they found US stocks closed higher after initially falling" and so had to buy back their positions, he added.

The strong overnight showing on Wall Street also impacted Hong Kong, where the Hang Seng Index closed down 0.47 percent lower. Dealers said the trade was cautious but that dealers found some support in the resilient showing of foreign markets after the attacks.

South Korean share prices fell by the same margin, 0.47 percent, with the market riding out the bomb blasts only to fall to profit-taking.

LG Philips LCD pressured the downside after it announced a sizable share offer plan.

The Australian and New Zealand stock markets both bounced back from early lows, with Australian share prices closing little changed and New Zealand's benchmark index down 0.15 percent.

"I think we've had a bit of experience in these things now," FW Holst economic and market analyst Michael Heffernan said of extremist attacks.

"Shocking as they are, I think they are perceived to be one-off events and it doesn't really affect the underlying fabric of the market," he said.

Meanwhile, European stocks rose, bonds retreated and the US dollar steadied yesterday as markets swiftly recovered their poise after Thursday's deadly blasts in London, with attention turning to US jobs data due later in the day.

"After yesterday's predictable but orderly financial market reaction to the tragic events in London, markets today have begun to unwind their flight to quality trades," UBS said in a morning note to clients.

The FTSEurofirst300 index of leading European shares rallied 0.9 percent to 1,146 points, just six points below where the index was before news of the attacks hit traders' screens on Thursday and within striking distance of three-year highs.

All sectors in Europe rallied, with oil and gas stocks leading as US light crude climbed to US$61.50 a barrel after a short-lived plunge on Thursday.
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