Samsung drops more than 2%; Nikkei reclaims 20,000
Geopolitics helped prompt profit-taking in Asian shares Thursday following this week's strength.
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As expected, U.S. President Donald Trump signed a bill on Wednesday that imposed fresh sanctions on Russia, North Korea and Iran even as he expressed concern that the "seriously flawed" legislation "will drive China, Russia, and North Korea much closer together."
"North Korea continues to be a major question" for investors buying additional stock, said Castor Pang, research chief at Hong-Kong based financial firm Core Pacific-Yamaichi.
South Korean stocks led the way lower. They have shown repeated ability this year to shrug off North Korean provocations, including its string of missile launches. Coming into Thursday, the Kospi was one of the region's best-performing indexes, rising 20% and topping highs set in 2011.
The index fell more than 2% in morning trading, but by midday the decline had narrowed to 1.7%. A big pressure point was index giant Samsung Electronics (005930.SE) , which fell 2.5%--erasing its gains for the week--as the Samsung conglomerate's de facto head testified for the first time at his corruption trial.
For the market at large in Korea, the prospect of higher corporate and personal income taxes under the country's new leadership is also weighing on sentiment, said Andrew Bresler, deputy head of sales trading for Asia-Pacific at Saxo Capital.
The stock slide also fueled morning declines in the country's well-performing currency. The as recently up 0.5% versus the won, with the move exasperated by potential trade tensions between the U.S. and South Korea, said Heng Koon How, head of markets strategy at UOB Group.
Taiwan stocks also saw profit-taking on Thursday, after being a standout on Wednesday following Apple's (AAPL) strong quarterly report. The Taiex declined 0.5% after hitting 27-year highs a day earlier.
Declines were more modest elsewhere. Australia's S&P ASX 200 shed 0.2%, the Shanghai Composite lost 0.4% and Hong Kong's Hang Seng slipped 0.3%. Hong Kong saw some profit-taking as money moved from tech to financial stocks, said Ben Bei, head of equity research at CIMB.
Japan's Nikkei , meanwhile, moved back above 20,000 after the midday break, cutting the day's drop to 0.3%.
Analysts also said stock buying would be somewhat muted Thursday ahead of the Bank of England's policy meeting later in the day.
Read:Confusion reigns for investors ahead of Bank of England's 'Super Thursday' (http://www.marketwatch.com/story/confusion-reigns-for-investors-ahead-of-bank-of-englands-super-thursday-2017-08-01)
(END) Dow Jones Newswires
August 03, 2017 05:47 ET (09:47 GMT)