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Asian shares fall on news of Ukraine air tragedy

/ 12:03 PM July 18, 2014

AP FILE PHOTO

HONG KONG — Asian markets tumbled on Friday after a Malaysia Airlines plane came down in battle-wracked Ukraine, sparking geopolitical tensions and sending Wall Street tumbling.

Investors fled into safer assets such as the yen and gold, while airline stocks retreated as news filtered through that almost 300 people had died after what the United States said was a hit from a surface-to-air missile.

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Shares in Malaysia Airlines, already battered by the loss of flight MH370 earlier this year, lost 17.8 percent in early exchanges on the Kuala Lumpur stock market, while other regional carriers also slipped.

Tokyo tumbled 1.40 percent, Hong Kong shed 1.09 percent, Sydney lost 0.17 percent, Shanghai eased 0.37 percent and Seoul was 0.45 percent lower.

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MH17 was carrying 298 people from Amsterdam to Kuala Lumpur when it crashed in eastern Ukraine, with US officials saying it was shot down.

Kiev said the jet was shot down in a “terrorist act”, while comments attributed to a pro-Russia rebel chief suggested his men may have downed it by mistake, believing it was a Ukrainian army transport plane.

However, Russian President Vladimir Putin said Ukraine bore responsibility for the crash, which came as Ukrainian forces battle pro-Moscow insurgents in the east of the country.

The UN Security Council has called an emergency session on Friday to discuss the disaster.

‘Nothing but the crash’

The market plunge was triggered by “nothing but the crash”, said Hirokazu Kabeya, senior strategist at Daiwa Securities.

“We still don’t know details of the incident but need to shun risks,” he said, adding the market would continue to be weighed down as investors watch developments.

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“Tensions had been simmering but they came to the fore again… (Investors) can’t be so bold to push ahead with buying at this moment,” he said.

Shares in Malaysia Airlines tumbled 17.8 percent at one point on the news, which comes months after Flight MH370 went missing with hundreds on board.

The sell-off affected other airlines, with Japan’s JAL losing 0.83 percent and ANA 1.20 percent lower, while Hong Kong’s Cathay Pacific lost 1.40 percent.

In Tokyo trade Japan’s two biggest airlines fell. All Nippon Airways slid 1.20 percent to 245 yen while Japan Airlines gave up 0.83 percent to 5,930 yen.

On Wall Street the Dow fell 0.94 percent from Wednesday’s record close, while the S&P 500 sank 1.18 percent and the Nasdaq was down 1.41 percent.

The dollar also took a hit as traders moved into the yen, which is considered a safe hedge bet during times of political and economic uncertainty.

In early trade the greenback was at 101.22 yen, a tad up from 101.17 yen in New York but well down from 101.51 yen in Tokyo earlier Thursday.

The euro bought 136.77 yen and $1.3514 from 136.83 yen and $1.3525.

On oil markets US benchmark West Texas Intermediate for August delivery was up 42 cents in morning trade at $103.61 a barrel and Brent crude for September advanced 46 cents to $108.35.

Gold, also a safe haven, jumped to $1,315.38 by 0200 GMT compared with $1,302.90 late Thursday.

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TAGS: Asia, Asian shares, Business, Finance, Foreign Exchange, Malaysian Airlines, stocks, Ukraine
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