Most Asian Stocks Slide On North Korea Missile, But Losses Pared
- Asian stocks slipped across the board on news of North Korea’s missile overflight of Japan, but many recoverered a little into the close
- The Japanese Yen was bolstered however as investors sought perceived havens
- Oil prices rose as news of US refinery outages sent gasoline soaring
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Asia Pacific equity markets were down but in many cases off their lows Tuesday in a session characterized by a sharp contraction in risk appetite.
North Korea launched some form of long-range missile just as trade was getting under way. While this is sadly not an unusual event, this weapon flew over Japan before landing in the sea, prompting an outraged diplomatic response from Tokyo and around the world. Japanese Prime Minister Shinzo Abe requested an urgent meeting of the United Nations Security Council to discuss the launch and the body is set to meet later Tuesday. The perception that Pyongyang was upping its defiance was more than enough to see markets lower across the region. Investors were already nervously watching storm Harvey’s destructive landfall on the US Gulf coast and hardly needed another reason to take money off the table.
The Nikkei 225 was down 0.5% into the close, with South Korea’s Kospi off 0.7%. Australia’s ASX shed 0.7%. The Shanghai Composite was once again an outperformer as it has been for a few sessions now. It was in the green- if barely- rising 0.08%.
Perceived haven assets were in demand, which saw the Japanese Yen rise against the US Dollar while the likes of the Australian Dollar came under pressure. Economic data passed the market by, with news that Japanese unemployment remained stable at 23-year lows rating hardly a glimmer of interest.
Crude oil prices rose tracking much larger rises for US gasoline prices as widespread refinery outages followed in Harvey’s horrible wake. News of crude supply disruption in Colombia and Libya also boosted prices. Gold prices hit their highest levels since November as investors sought financial shelter.
In terms of scheduled economic news, the rest of Tuesday will be US-focused. Offical consumer confidence data are coming up as is the Conference Board’s monthly snapshot of economic conditions
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter:@DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.