ASIA MARKETS: Asian Markets Continue To Fall After Wednesday's Selloff

By Kenan Machado Features Dow Jones Newswires

Hong Kong, South Korea, Taiwan markets down more than 1%

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A wave of selling washed over many Asian stock markets Thursday after they opened little changed, with low volumes likely amplifying the effects of the rhetorical battle between the U.S. and North Korea.

"There was obviously some profit-taking after a couple of weeks of strong performance," said Bertram Lai, head of equities at CIMB Securities in Hong Kong.

Selling was led by some of this year's best-performing markets. Hong Kong shares started sliding after a quiet first 30 minutes, sending the Hang Seng Index down 1.6%. Financial stocks led the way; HSBC was off more than 2%, as were major Chinese-based companies. The market has been on fire the past month, up in 19 of 22 sessions before a broad pullback Wednesday on the rising geopolitical worries.

Other markets in the region began falling notably at about the same time as Hong Kong, and by midday benchmark indexes in Korea and Taiwan -- among the world's best performers of late, hitting record and 27-year highs, respectively -- were down more than 1%.

As in Hong Kong, financials were weak in Taiwan, as were some big-name tech stocks. Apple suppliers Largan (3008.TW) and Hon Hai (2317.TW) fell 3% and 1.7%, respectively.

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In a second day of specific threats aimed at the U.S., North Korea lashed out at President Donald Trump and warned of an "enveloping fire" in the coming weeks targeting Guam.

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This latest geopolitical row offered the perfect excuse for some folks looking to harvest profits, said Bright Smart Securities.

The ratcheting-up of tensions comes during what's often a slow trading time for markets in general as many people in the Northern Hemisphere take late-summer holidays.

Big price swings are common at times of low volume, and the current one is likely to persist for the rest of the month, said Rob Carnell, head of research for Asia at ING.

In China, the small-cap-heavy ChiNext index started with a bang, rising nearly 1%, but finished the morning session down 1.1%, about matching declines at China's other stock markets.

Lai at CIMB said blame could go to Beijing's raising the daily trading midpoint for the yuan versus the dollar by 0.5%, the biggest jump since June 1. The currency has been at its strongest levels in nearly a year against the dollar, and he speculated that concerns about the government's response may be hitting risk appetite in China.

"People are wondering what is going on," added Lai.

Markets in Australia and New Zealand, which rose Wednesday as Asia Pacific markets fell widely, are slightly higher again Thursday. While Australian stocks have lagged behind the region this year, New Zealand's benchmark has been hitting record highs of late.

Meanwhile, Japanese stocks were little changed as the dollar steadied around Yen110 and investors stayed cautious ahead of a three-day weekend.

(END) Dow Jones Newswires

August 10, 2017 01:02 ET (05:02 GMT)