Asian stock markets Monday generally retreated in the face of ongoing geopolitical tensions on the Korean Peninsula, and the prospects for higher global interest rates engineered by the U.S. Federal Reserve. There are some concerns short-term “hot money” could leave the Far East for the United States, if the Fed raises rates too aggressively. Tokyo gained on a steady yen, but Hong Kong fell markedly and Shanghai slipped, while other regional exchanges mostly fell. In Seoul, the Kospi stepped back 0.35%.
In Tokyo, the Nikkei 225 bucked regional tides and rose 0.50%, as traders embraced the outlook for a softer yen, considered a positive in export–oriented Japan. Despite renewed geopolitical tensions which sometimes support the yen as a safety haven, the Japanese currency held about 112 to the U.S. dollar Monday.
In other news, Prime Minister Shinzo Abe said his intention is to schedule a “snap” election, probably for October. Abe has large leads in opinion pols over potential rivals. Also, the Bank of Japan Governor Haruhiko Kuroda warned that North Korea represents a risk to slowly improving East Asian economic prospects.
The Nikkei 225 gained 101.13 to 20,397.58, as gaining issues outnumbered losers 157 to 60.
Leading the upside were Mitsubishi Motors (MMTOF, 7211:Tokyo), up 3.6%; followed by Nippon Sheet Glass (NPSGY, 5202:Tokyo), up 3.4%; and then personal-products house Shiseido (SSDOY, 4911:Tokyo), up 3.3%.
On the downside were ball–bearing maker Minbea (MNBET, 6478:Tokyo), off 3.0%; and then shipper Mitsui OSK (MSLOY, 9104:Tokyo), off 2.0%.
The Hong Kong Hang Seng Index opened lower and slid in trading, finishing off 1.36%, as traders turned skittish on regional property issues, which may feel the impact of higher global interest rates engineered by the U.S. Federal Reserve. Additionally, some cities in mainland China are instituting financial and regulatory controls, to cool off hot housing markets.
The broad gauge Hang Seng fell 380.19 to 27,500.34, as falling issues outnumbered gainers 45 to five.
Leading the scant upside were diaper-maker Hengan International (1044:HK), up 0.7%; followed by Hang Seng Bank (11:HK), up 0.6%; and then utility-holding company CLP Holdings (2:HK), up 0.3%.
On the downside were developers China Resources Land (1109:HK), off 7.1%; and then China Overseas Land (688:HK), off 6.8%.
On the mainland, the Shanghai Composite shed 0.33% to 3,341.55.
On the other exchanges, the Taiwan TWSE fell 1.09%; the Australian ASX 200 inclined 0.03%; the Singapore Straits Times Index lost 0.13%; but the Thai Set gained 0.51%. In late trading in Mumbai, the Sensex was off 0.89%.