Stock Markets Broadly Down as Investors Turn Cautious -- Update

By Ese Erheriene Features Dow Jones Newswires

Major stock indexes in Asia fell slightly on Friday, mirroring Wall Street's cautious sentiment on risk taking, though strong earnings results from tech companies saw shares in the sector rise.

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The market-friendly result of the first round of elections in France helped the region start the week strongly, but stocks have given back some of their gains as investors refocused on local drivers.

The Nikkei Stock Average was down 0.2% in afternoon trade despite a softer yen, as traders wound down activity ahead of the Golden Week holiday next week. The S&P/ASX 200 in Australia was down 0.1%, while Hong Kong's Hang Seng Index retreated 0.5% at the midday break.

In South Korea, meanwhile, the benchmark Kospi pared gains and was last down 0.2%, after touching a six-year high earlier in the session, following comments by U.S. President Donald Trump that he would renegotiate or terminate a trade pact with the country, according to Reuters. The Korean won also turned lower against the U.S. dollar and was last down 0.4%.

Mr. Trump also said a major conflict over North Korea's nuclear ambition is possible.

"The fact there's potential for a showdown with North Korea, that's always going to worry investors in Japan," said Andrew Sullivan, managing director of Haitong International Securities.

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"You [might] get the North Koreans put into a corner and they feel they just have to do something...One risks pushing them too far."

In the tech sphere, shares of Japan's Nintendo gained 2.3% after it reported better-than-expecting fiscal-year results. The company recorded a net profit of 102.6 billion yen ($920 million) for the year ended in March, beating street forecasts of Yen93.6 billion.

Net profit for the gaming giant was helped by the weak yen, which inflated the value of the company's foreign-currency-denominated holdings. The company booked a net profit of Yen16.5 billion in the year-earlier term ending in March last year.

Also in tech, shares of Samsung Electronics added 2.7%, building on Thursday's 2.4% gain, as investors digest the company's restructuring news and its delivery of the best quarterly net profit in more than three years.

Meanwhile, in technology hub Taiwan, the Taiex tech subindex added 0.1% versus the benchmark index's decline of 0.1%.

Markets in mainland China resumed their decline, after a late-session turnaround on Thursday, as investors took profits in consumer stocks. Some analysts felt that there is limited room for markets to weaken further and expect a period of range-bound trading. The Shanghai Composite Index was down 0.3% at the midday break, while Shenzhen's main board was flat.

Elsewhere, Japanese industrial production fell 2.1% on month in March, data released Friday show. The fall was worse than a 1.0% decline forecast by economists surveyed by the Nikkei and came after a 3.2% increase in February.

However, retail sales rose 2.1% from a year earlier in March, after a revised 0.2% increase in February, the government said Friday.

In currencies, the yen reversed declines against the dollar after Mr. Trump's comments. Moreover, the dovish stance by European Central Bank President Mario Draghi will likely weaken the dollar versus the yen in the short term, said Osamu Takashima, chief forex strategist at Citigroup Global Markets Japan.

Additionally, the Mexican peso softened 0.3% versus the greenback, correcting after a jump following Mr. Trump's decision to renegotiate the North American Free Trade Agreement, rather than scrapping it altogether.

Looking ahead, Asian stocks will likely struggle to find clear direction ahead of the Labor Day holiday for many markets in the region Monday. In Japan, markets will be closed Wednesday through Friday.

In the U.S., the S&P 500 and the Dow Jones Industrial Average rose less than 0.1%, while the Nasdaq Composite gained 0.4%, hitting a fresh closing high.

Kosaku Narioka and Hiroyuki Kachi and

Yifan Xie

contributed to this article.

Write to Ese Erheriene at ese.erheriene@wsj.com

European markets opened lower Friday ahead of a long weekend for much of the region, following Asian bourses lower.

The market-friendly result of the first round of elections in France helped the region start the week strongly, but stocks have given back some of their gains as the week comes to an end.

The Stoxx Europe 600 index was down 0.16% shortly after markets opened.

In foreign exchange markets, the euro picked up 0.12% to $1.088, after falling Thursday on European Central Bank President Mario Draghi's insistence that the era of easy monetary policy isn't over in Europe.

"There is clearly a risk that we could stand at the June meeting with an ECB that changes its forward guidance in a more hawkish direction provided the cyclical situation looks good," said Pernille Bomholdt Henneberg, chief analyst at Danske Bank.

In Asia, Japan's Nikkei 225 index closed down 0.29%. Hong Kong's Hang Seng Index was down 0.33%. China's Shenzhen A-share index bucked the trend, rising 0.27%.

South Korea's Kospi closed 0.18% lower after President Donald Trump said he wanted to renegotiate a trade deal with the country in an interview with Reuters.

Mr. Trump also said a major conflict over North Korea's nuclear ambition is possible.

"The fact there's potential for a showdown with North Korea, that's always going to worry investors in Japan," said Andrew Sullivan, managing director of Haitong International Securities. "You [might] get the North Koreans put into a corner and they feel they just have to do something...One risks pushing them too far."

In the tech sphere, shares of Japan's Nintendo gained 2.3% after it reported better-than-expected fiscal-year results. The company recorded a net profit of Yen102.6 billion ($920 million) for the year ended in March, beating street forecasts of Yen93.6 billion.

In the U.S., the S&P 500 and the Dow Jones Industrial Average rose less than 0.1% Thursday while the Nasdaq Composite gained 0.4%, hitting a fresh closing high.

Kosaku Narioka and Hiroyuki Kachi and

Yifan Xie

contributed to this article.

Write to Mike Bird at Mike.Bird@wsj.com and Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

April 28, 2017 03:45 ET (07:45 GMT)