Stock markets across Southeast Asia tumble as investor sentiment is hurt after North Korean fired a ballistic missile over Japan as investors are likely to turn to safe-haven assets like gold.
At late morning, Malaysia’s FBM KLCI declined 10 points or 0.57% to 1,759.49. Indonesia’s Jakarta Composite Index dropped 26.92 points or 0.46% to 5,876.42, Singapore’s Straits Times Index fell 6.88 points or 0.21% to 3,260.74, Vietnam HNX Index declined 0.16 points or 0.15% to 103.74, Lao Security Exchange Composite Index was unchanged at 1,019.49 and the Philippine Stock Exchange declined 17.49 points or 0.22% to 7,997.65. The only exception is the Thailand SET 50 Index, which gained 1.37 points or 0.14% to 1,011.94. MIDF Amanah Investment Bank head of equity Syed Muhammed Kifni Syed Kamaruddin says ASEAN markets are obviously feeling jittery as evident by the broadly negative performance this morning, following the latest North Korean missile launch. Gold prices broke above the US$1,3000 resistance level on Monday due to the less-than-hawkish Jackson Hole speech by the U.S. Fed Chair Yellen. “There have been multiple missile launches before but the latest one reportedly went right over Japanese airspace. For as long as the anticipated response from Japan and its allies is seen as nothing more than mere sabre rattling, we expect the market would soon regain its composure.”
Hong Leong Bank in its global markets research says a North Korean missile firing over Japan early morning sent investors scurrying for safety, Japanese yen takes a huge leap to as high as 108.34 against the U.S. dollar while gold hits US$1,325 per ounce, its highest in 11 months. This should keep Asian markets in risk-off mode today. Overnight global financial markets ended little changed in the absence of major economic and earning releases. Meanwhile, oil prices plunge to as low as US$51.5 per barrel on destruction on US oil infrastructure by Hurricane Harvey before rebounding to US$51.9 per barrel at the close, hovering slightly above its lowest point within the week.
Bloomberg reports that North Korea fired an unidentified ballistic missile over Japan on Tuesday, reigniting tensions following heated exchanges between Pyongyang and U.S. President Donald Trump earlier this month. The missile landed about 1,200 kilometres (745 miles) off Hokkaido in the Pacific Ocean, Chief Cabinet Secretary Yoshihide Suga tells reporters, adding there were no reports of damage. Japan’s government says it didn’t try to shoot it down. “A missile passing over Japan is an unprecedented, grave and serious threat,” Prime Minister Shinzo Abe told reporters in Tokyo. Japan has asked the United Nations Security Council to hold an emergency meeting.