Asia report: Markets mixed amid rising Middle East tensions
Markets in Asia finished mixed on Friday, as investors digested an escalation of tensions in the Middle East following the reported shooting down of a US surveillance drone on Thursday.
In Japan, the Nikkei 225 as down 0.95% at 21,258.64, as the yen weakened 0.18% against the dollar to last trade at JPY 107.49.
Of the major components on the benchmark index, automation specialist Fanuc managed gains of 0.5%, while fashion firm Fast Retailing was off 2.07% and technology conglomerate SoftBank Group lost 2.52%.
The broader Topix index shed 0.9% to settle at 1,545.90 in Tokyo.
London Capital Group senior market analyst Ipek Ozkardeskaya said that Japanese stocks were feeling the pinch of a stronger Japanese yen on Friday.
“The yen appreciated 1.40% against the US dollar this week, while the Bank of Japan’s governor [Haruhiko] Kuroda sounded quite detached in the face of the falling JGB yields.
“He said that some flexibility in yields is acceptable.
“It is perhaps just a matter of time before the decline in Japanese yields ring the alarm bell among the Japanese policymakers.”
On the mainland, the Shanghai Composite was ahead 0.5% at 3,001.98, and the smaller, technology-heavy Shenzhen Composite added 1.34% to 1,577.44.
South Korea’s Kospi fell 0.27% to close at 2,125.62, while the Hang Seng Index in Hong Kong also finished 0.27% weaker at 28,473.71.
The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics last up 0.44% and chipmaker SK Hynix falling 2.08%.
Sentiment was strong earlier in the session, after Wall Street markets finished on a high following the Federal Reserve’s policy decision earlier in the week.
The central bank had stood pat on interest rate targets, but did leave the door to rate cuts in 2019 slightly ajar.
That positive mood soon took a dive, however, as tensions in the Middle East continued to tighten, following a reported attack on a US unmanned surveillance drone on Thursday - an action which Washington pinned squarely on Iran.
Reports late in the Asian day suggested US president Donald Trump had approved an attack on the Islamic Republic late on Thursday in the US, but quickly backpedalled on it as aircraft and military ships positioned themselves.
Oil prices were higher as the region went to bed, following developments in the Middle East, with Brent crude last up 0.46% at $64.75 per barrel, and West Texas Intermediate adding 0.25% to $57.21.
In Australia, the S&P/ASX 200 lost 0.55% to end its trading day at 6,650.80, with biotechnology firm CSL among the leading losers, as its shares dropped 3.17%.
The company had told investors earlier in the day that it was looking at lower sales to China in 2020, due to changes to the way it distributes to the country.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.4% stronger at 10,327.29, amid very heavy trading in Wellington.
Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.12% at AUD 1.4462, and the Kiwi retreating 0.27% to NZD 1.5229.