Moneycontrol
Apr 10, 2017 07:37 AM IST | Source: CNBC

Asian equities mixed with Nikkei posting gains despite regional tensions

The Kospi was down by 0.52 percent, with China-exposed stocks pressured following heightened tensions in the Korean peninsula. Shares for Lotte Shopping, the retail arm of conglomerate Lotte, fell by 1.59 percent, while shares of LG Electronics plunged 1.97 percent.

Asian equities mixed with Nikkei posting gains despite regional tensions

Asian equities were mixed in Monday trade despite heightened geopolitical tensions after a missile strike on a Syrian airfield last Friday ordered by President Donald Trump and a move by the US military to send an aircraft carrier group near the Korean Peninsula in response to recent provocations by North Korea.

Trump said the strike targeted an airbase responsible for launching a chemical attack in northeast Syria earlier last week. The attack was launched while Trump was hosting Chinese President Xi Jinping at his Florida resort.

North Korea responded to the strike by stating that it was a justification for its own nuclear weapons program, adding that it had to protect itself against Washington's "reckless moves for a war." In turn, a US Navy strike group is expected to move near the western Pacific Ocean and close to the Korean peninsula following North Korea's multiple nuclear missile test launches this month.

The news did not weigh on Japan's benchmark Nikkei 225 index, which bounced 0.77 percent. The ASX 200 was higher by 0.58 percent, driven mostly by its utilities and energy sub-indexes.

The Kospi was down by 0.52 percent, with China-exposed stocks pressured following heightened tensions in the Korean peninsula. Shares for Lotte Shopping, the retail arm of conglomerate Lotte, fell by 1.59 percent, while shares of LG Electronics plunged 1.97 percent.

Shares of LG Display, LG Corporation's LCD manufacturing arm, popped 1.17 percent at 30,200 won per share on a reported offer from Google to invest a minimum of USD 1 trillion won (USD 880.29 million) in screen production. The investment would assist in increasing the production of organic light-emitting diode (OLED) screens for Google's Pixel line of smartphones, the Electronic Times said. LG Display did not respond to an email request for confirmation about the investment.

Mainland Chinese markets traded lower, with the Shanghai Composite declining 0.21 percent and the Shenzhen Composite 0.485 percent lower. Hong Kong's Hang Seng Index dipped 0.15 percent.

The dollar was higher against a basket of currencies at 101.250 at 9:30 am HK/SIN time, its highest level in nearly 3 weeks. The dollar/yen traded at 111.41, higher compared to levels around 110.86 seen last week while the Aussie was softer at USD 0.7505, versus the USD 0.76 handle seen last week.

In corporate news, miner Rio Tinto reported paying USD 4 billion in taxes and royalties last year after it was ordered to pay an extra USD 284 million with interest due to its operations in tax-friendly destinations. The news comes as the Australian Taxation Office pays greater attention to the amount of taxes paid by multinational corporations based in Australia. Rio Tinto shares were up by 0.64 percent and trading at AUSD 60.395.

On the energy front, Brent crude was up 0.22 percent at USD 55.36 a barrel while US crude was higher by 0.34 percent to USD 52.42 a barrel.

In Japan, the February un-adjusted current account balance surplus jumped to the largest since March 2016 at 2.814 trillion yen, compared to 2.616 trillion yen seen.

Other economic data expected today includes Australia February home loans and outstanding loan growth for the month of March from China later in the day.

Stateside, US equities closed flat in reaction to the missile strike, with the S&P 500 shedding 0.08 percent to 2,355.54 points, the Dow Jones industrial average tracking lower by 0.03 percent to close at 20,656.10 and the Nasdaq down by 0.02 percent to finish at 5,877.81. This was also on the back of a mixed jobs report, which saw just 98,000 jobs added in March, below expectations of 180,000 new jobs.

"Now that the US nonfarm payroll is over, traders are going to put their focus back on the Fed, who have been talking about winding down their balance sheet. The Fed need to be very careful in their approach of conveying their message while they release their purchased bonds back on the market," Think Markets chief market analyst Naeem Aslam said in a note.
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