ASIA MARKETS: Tech Stocks, North Korea Tensions Drag Asian Markets Down

By Kenan Machado Features Dow Jones Newswires

Chinese firms follow slide by U.S. tech stocks

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Equity markets in Asia were lower on Tuesday, hurt by fresh threats from North Korea and weakness among key technology stocks.

North Korea's foreign minister warned overnight that his country would shoot down U.S. warplanes even if they were outside the nation's airspace.

The White House dismissed assertions about war and the Pentagon brushed off the military threat.

In South Korea, the Kospi trimmed early declines but it was still down 0.1% after ending lower for five straight sessions on Monday. Samsung Electronics (005930.SE) was down 1.4% and Korean Air Lines (003490.SE) was 1.9% lower.

"The markets are cautious but yet to fully price in a flare up in military conflict," said Ivan Ip, a stock strategist at UOB Group. Trading sentiment was already bearish, given the Federal Reserve's plans to taper its balance sheet which should lead to tighter liquidity, he said.

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Following an overnight slide in U.S. internet stocks, including Chinese firms like Baidu (BIDU) and Alibaba Group Holding (BABA) , Hong Kong heavyweight Tencent Holdings (0700.HK) was down as much as 3.8% at the open. The weakness dragged the Hang Seng Index down 0.7% initially, though it was recently up 0.1%.

Meanwhile, Hong Kong-listed Chinese developers and Apple suppliers -- which were down on Monday -- remained under pressure. AAC Technologies Holdings (2018.HK) was down 0.5%, while China Overseas Land & Investment (0688.HK) was off 0.6%.

Chinese developers were weaker as local governments there rolled out new measures to cool the frothy property market.

"Given the strong performance of the [property] sector, I don't think it's a surprise that some investors moved to lock in some profits, especially in light of recent policy measures," said David Millhouse, head of research for China at Forsyth Barr Asia.

Elsewhere, Japan's Nikkei Stock Average was down 0.3%, dragged lower by overnight yen buying. The U.S. dollar was last buying Yen111.62, compared with around Yen112.22 at the end of Tokyo equity trading on Monday.

Tech stocks in Japan also faced selling pressure, with Sony (6758.TO) and Nintendo (7974.TO) down 2.1% and 2.6%, respectively.

Energy stocks in the region gained on the overnight return to bull-market territory for U.S. oil prices.

In Japan, Inpex Corp. (1605.TO) and Japan Petroleum Exploration (1662.TO) were up around 3% each and Australia's Oil Search (OSH.AU) was 2.8% higher. Santos (SSLTY) added 4% in the Sydney market, as Woodside Petroleum (WPL.AU) advanced 2.9%.

Australia's S&P/ASX 200 was down 0.1%, dragged lower by weakness in metals and finance stocks.

(END) Dow Jones Newswires

September 25, 2017 23:35 ET (03:35 GMT)