Asia Markets

Asian shares drift lower amid US-Russia tensions on Syria

Key Points
  • Asian stocks edged down as investor confidence wavered amid geopolitical tensions.
  • President Donald Trump warned Russia about a possible missile strike on Syria in a Twitter post on Wednesday.
  • Oil prices gained after touching their highest levels in more than three years in the last session.

Asian stocks closed lower on Thursday as investor confidence seen earlier in the week wavered overnight amid geopolitical tensions.

The eased 0.12 percent, or 26.82 points, to close at 21,660.28. The broader Topix was lower by 0.39 percent as its automakers and oil sectors slid, while consumer goods stocks notched slight gains as investors digested earnings.

Over in South Korea, the Kospi gave up gains late in the session, slipping 0.06 percent to close at 2,442.71. Cosmetics plays sank, but oil-related stocks and most technology names advanced, with Samsung Electronics finishing the session up 0.29 percent.

Down Under, the S&P/ASX 200 closed lower by 0.23 percent at 5,815.50 as gains in the materials and energy subindexes were offset by the move lower in industrials, among other sectors. The heavily weighted financials sector slipped 0.44 percent.

Hong Kong's pared early gains to edge down by 0.74 percent by 3:00 p.m. HK/SIN despite strength in the energy sector, which was buoyed by the advance in oil prices. Tech names were downbeat, with Tencent lower by 2.19 percent ahead of the market close.

Markets on the mainland, meanwhile, closed in negative territory. The slipped 0.87 percent to end at 3,180.20 and the Shenzhen composite finished the day lower by 0.58 percent at 1,840.27.

MSCI's broad index of shares in Asia Pacific excluding Japan declined, last trading lower by 0.54 percent.

Geopolitical jitters 

The cautious moves in the region on Thursday tracked the weaker lead on Wall Street following a tweet from President Donald Trump taunting Russia about a possible missile strike on Syria.

Trump's tweet that Russia should "get ready" for a potential strike on Syria came after a likely chemical weapons attack over the weekend on a rebel-held town in the eastern Ghouta region of Syria.

"The missile tweet was sufficient to frighten the horses to some extent, dampening risk sentiment," David de Garis, director of economics at National Australia Bank, said in a note.

The newfound focus on geopolitics took the focus off a trade spat between the U.S. and China.

Asian markets had bounced earlier in the week after remarks from Chinese President Xi Jinping promising some steps to further open up China's economy. That confidence wavered in the last session as investors awaited signals that Xi's comments would translate into action.

Investors also digested the release of minutes from the Federal Open Market Committee's March meeting, which reflected that "all" policymakers expected the U.S. economy to continue growing and for inflation to rise. Those views strengthened the belief that more interest rate hikes lay ahead.

Gold prices, which initially rose on the back of heightened political risk in the Middle East in the last session, gave up some gains following the release of minutes from the Fed.

In currencies, the dollar pared some losses after coming under pressure against the safe-haven Japanese currency amid the pick up in geopolitical risk overnight. Against the yen, the dollar traded at 106.83 by 2:45 p.m. HK/SIN.

The dollar index, which tracks the U.S. currency against six rival currencies, was mostly flat at 89.532.

Of note, the Hong Kong dollar touched a 33-year low earlier on Thursday, touching the low end of its trading band between 7.75 and 7.85 per dollar. The currency, which is pegged to the greenback, last traded at 7.8498 to the dollar.

Oil prices extended gains after surging in the last session as markets focused on geopolitical risk. U.S. West Texas Intermediate was higher by 0.52 percent at $67.17 per barrel and Brent crude futures shed edged up 0.32 percent to trade at $72.29.

Global benchmark Brent touched its highest levels in more than three years in the last session following Trump's tweet on Wednesday.

In economic news, the Bank of Korea kept interest rates steady at 1.5 percent on Thursday, a move that was largely expected by the market.

Meanwhile, in individual movers, Japanese retailer Aeon jumped 4.06 percent after the company announced that annual profit rose 14 percent compared to one year ago.