Asian markets suffer as US-North Korea tension escalates anew
Asian markets fell again Wednesday as nervous traders shifted toward safe havens on concerns about North Korea’s latest saber-rattling, while technology firms suffered another torrid day of selling.
Washington confirmed Tuesday that Pyongyang’s latest rocket test was of a missile capable of reaching the United States, ratcheting up pressure in an already tense crisis on the Korean peninsula.
Dealers are now awaiting the next development after Russia and China issued a joint appeal to ease tensions while the United Nations Security Council will hold an emergency meeting later in the day.
The test came just as the US was preparing to celebrate Independence Day and days before a G20 summit, where it will likely top the agenda.
It was the latest provocation by North Korean leader Kim Jong-Un who is determined to develop a nuclear weapons program he says is needed to ward off invasion.
South Korea and the US on Wednesday launched a barrage of missiles simulating a precision strike against Pyongyang, in response to the provocation.
“Traders and investors may be wondering what reaction this latest missile test will get,” said Greg McKenna, chief market strategist at AxiTrader.
With caution flowing through trading floors, markets sank into negative territory.
Tokyo ended the morning 0.5 percent lower with the yen, considered a safe bet in times of turmoil and uncertainty, strengthening against the dollar which hurt Japan’s exporters.
Hong Kong slipped 0.1 percent a day after diving 1.5 percent, while Shanghai shed 0.2 percent. Sydney lost 0.3 percent, Singapore eased 0.1 percent and was marginally lower.
Wellington and Taipei were also in the red.
Traders were given few leads with European markets slightly down and Wall Street closed for the July 4 holiday.
Tech firms were again suffering as global central banks consider tightening monetary policy.
The sector has been a huge beneficiary of the years of cheap borrowing from lenders, sending their stock prices soaring but the prospect of an end to such largesse has led to profit-taking.
Hong Kong-listed Tencent extended Tuesday’s more than four percent loss, while AAC Technologies also retreated and Sony slipped in Tokyo.
However, energy companies continued to benefit from the recovery in oil prices although the black gold, which is up about 10 percent since hitting recent lows in mid-June, dipped slightly Wednesday in Asia.
Investors are awaiting the release Wednesday of minutes from the Federal Reserve’s June policy meeting and key US jobs data Friday. JPV
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