Asia report: Markets mixed as North Korea tensions tighten

Josh White WebFG News | 09 Aug, 2017 11:35 - Updated: 11:35 | | |

North Korea
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08:44 12/12/17
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09:21 12/12/17
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10:28 12/12/17
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10:28 12/12/17
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10:28 12/12/17

Most markets in Asia were lower on Wednesday, as concerns over rising geopolitical tensions on the Korean peninsula led the agenda, along with disappointing consumer inflation data in China.

In Japan, the Nikkei 225 was down 1.29% at 19,738.71, as the yen gained on the dollar, last moving ahead 0.43% to JPY 109.85.

In corporate news out of Tokyo, Sumitomo Mitsui Financial Group lost 1.27% and Yahoo Japan was off 0.2%, after the pair announced a joint venture to improve services through better processing of the bank’s customer data.

Technology conglomerate Toshiba was 3.2% higher, paring back gains of as much as 6% earlier in the session, as traders continued to celebrate the fact the firm’s auditor was about to sign off its much-delayed annual numbers.

On the mainland, the Shanghai Composite was off 0.19% at 3,275.57, and the smaller, technology-heavy Shenzhen Composite closed up 0.34% to 1,885.55.

Investors spent much of the session digesting China inflation data for July, in which consumer prices rose 1.4% year-on-year during the month, just missing forecasts for 1.5%.

Producer prices rose in line with expectations, increasing 5.5% year-on-year in July.

South Korea’s Kospi slid 1.1% to 2,368.39, while the Hang Seng Index in Hong Kong was 0.35% softer at 27,757.09.

Geopolitical tensions were at the fore, after US President Donald Trump said North Korea would be “met with fire and fury” if its threats against America continued.

He was responding to reports first published by the Washington Post that the belligerent state had successfully produced miniaturised nuclear weapons that could fit inside its missiles.

A few hours after Trump’s warning shot, Pyongyang retaliated by claiming it was planning to strike Guam - a US territory - with missiles.

Oil was lower during Asian trading, after reports that OPEC exports were up due to recent higher production from Libya and Nigeria.

Prices did recover during early European trading, however, as Brent crude was last up 0.48% at $52.39 per barrel and West Texas Intermediate 0.49% higher at $49.41.

In Australia, the S&P/ASX 200 finished 0.38% higher at 5,765.66, underpinned by the weighty financials subindex, which added 0.73%.

Commonwealth Bank of Australia was in the headlines for more positive reasons on Wednesday, reporting a 4.6% uplift in full-year profit, leading to a 0.57% rise in its shares in Sydney.

The bank’s board had scrapped its chief executive’s bonus on Tuesday, following allegations from regulators that it had led thousands of large transactions proceed without following proper anti-money laundering procedure.

On Monday, the bank had put the failure down to a coding error, and said it would defend the allegations.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 added 0.2% to 7,799.64, led higher by local cargo giant Mainfreight, which was 1.8% firmer.

Both of the down under dollars were weaker against the greenback, with the Aussie losing 0.31% to AUD 1.2674 and the Kiwi retreating 0.1% to NZD 1.3658.

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