Asia Declines On North Korea Missile Tests

Ivaylo
05 Jul, 2006
New York City

Early Wednesday, North Korea launched several missiles, including a long-range Taepodong-2 that failed after less than a minute, according to reports. Japanese, the U.S. and South Korean officials responded with sharp criticism. The launches also unsettled investors who were already jittery to selling pressures after several consecutive days of gains.

[R]7:30 AM Asian markets fell in the wake of North Korea missile launches.[/R]
Asian markets finished lower on Wednesday. The Japanese Nikkei 225 Index led the decline, shedding 0.73% to end the day at 15523.94. Exporters led Japanese decliners Wednesday. Nikon lost 0.49%, while Nintendo slumped 2.76%.Auto makers also suffered, with Honda plunging 2.17% and Toyota losing 1.16%. Nissan, whose board Monday announced it was open to bringing General Motors into its partnership with Renault, declined 1.9%. The Korea Composite Stock Price Index, In Seoul, sank 2.1% in opening minutes amid worries over the North Korea missile test, but then rebounded into positive territory briefly before slipping back. The benchmark index finished the session down 0.5% at 1279.85. The Hang Seng Index in Hong Kong fell 0.62% to 16267.18. Fixed-line phone company PCCW shed 0.89% amid concerns that negotiations over the potential sale of its telecom and media assets were at an impasse. China Netcom, which holds a 20% stake in PCCW and opposes the sale of the Hong Kong company''s core assets to foreign bidders, dropped 3.87%. China''s benchmark Shanghai Composite Index surged 2.2% as the Bank of China''s initial public offering of yuan-denominated Class A shares made its trading debut in Shanghai. Elsewhere around the region, Taiwan''s Weighted index shed 1.11%. Australia''s S&P/ASX 200 edged down 0.15%.

[R]6:30AM Europe fell by mid-morning on bank statement and North Korea scare.[/R]
European markets traded lower by mid-morning on Wednesday. The U.K. FTSE 100 index shed 0.4% at 5,860, the German DAX Xetra 30 index slipped 0.5% at 5,700 and the French CAC-40 index dropped 0.5% at 4,960. Among the decliners were British bank Alliance & Leicester losing 6.3% in London in the wake of France''s Credit Agricole announcement that it decided not to make an offer for Alliance & Leicester. Agricole slipped 0.3%. Tire makers, Continental and Michelin, each lost more than 1.5%, after Japan''s Sumitomo Rubber warned on 2006 profitability levels following higher raw material costs. Advancers included Irish building materials company CRH gaining 1.2% after it said that, due to an improved performance in each of its business segments. France''s Scor also advanced 4% after agreeing to buy German reinsurer Revios for 605 million euros ($775 million) from Globale Re.

Light sweet crude oil was traded over $73 a barrel, down 51 cents at $73.42. Gold was fixed in London at a recommended price of $625.75 bid per troy ounce at midmorning, up from $621.80 late Tuesday. Silver traded in London at $11.28 per troy ounce, up from $11.24. The dollar was up against the European currency. The euro traded at $1.2762, down from $1.2791 late Tuesday in London. The British pound traded at $1.8439, down from $1.8446. The dollar bought 115.04 Japanese yen, up from 114.58.