Most Asian stocks declined for the third time on Wednesday as investors lose appetite for risky investments in the wake of growing tensions between the US and North Korea.
MSCI’s broadest index of Asia Pacific shares outside Japan edged lower by 0.5 percent to $529.
Japan’s Nikkei 225 hit a four month low, closing with a 0.1 percent loss to ¥19,358 as the dollar remained soft.
Australia’s S&P/ASX 200 was at AU$ 5,689.73, shedding almost 0.3 percent amid heightened geopolitical tensions. Investors are also processing weaker-than-expected GDP data of the country.
Hong Kong’s Hang Seng was down by 0.4 percent to HK$27,613.76, whereas mainland China extended its gains for the third day with Shanghai Composite closing 0.03 percent higher to CN¥3,385.39, and Shenzhen Composite gaining 0.2 percent to CN¥1,972.14.
Philippines’ PSEi Composite dropped 0.8 percent to ₱7,983.97 led by declines from holding firm SM Investments and Bank of the Philippine Islands (BPI) of 1.6 percent and 1.7 respectively.
India’s BSE Sensex fell by 0.4 percent to ₹31,661.97, while the same goes for Nifty 50 closing almost 0.4 percent lower to ₹9,915.50.
Singapore’s STI index lost almost 0.7 percent to S$3,232.76, with financial firms accounting for most of the losses including DBS Group Holdings and Oversea-Chinese Banking Corp (OCBC) by 0.8 percent and 1.1 percent respectively.
South Korea’s Kospi was at ₩2,319.82, slipping nearly 0.3 percent in the end session with auto stocks falling on concerns about their sales in China. This is the index’s fourth consecutive day of decline as analysts pointed out that it is still keeping a close eye on possible further risks from the North.
North Korea’s Nuclear Test Escalating Tensions
North Korea has tested its sixth and what may be its most powerful nuclear weapon on Sunday, claiming that it detonated an advanced hydrogen bomb built for a long-range missile.
It was not officially verified if the weapon was really a hydrogen bomb, but what is certain is that the nuke’s strength exceeded the previous North Korean nuclear weapons test.
Japan estimated that the explosive yield of the bomb was at 160 kilotons, making it ten times more powerful than US’ World War II bombs Little Boy and Fat Man.
So far, the most powerful man-made explosion ever recorded was carried out by the Soviet Union’s Tsar Bomba in1961, with an explosive power that yielded 50,000 kilotons or 50 megatons.
The geopolitical concern continued with Han Tae Song, North Korea’s ambassador to the United Nations in Geneva, saying that the US will be receiving “more gift packages” as long as the country keeps on depending on careless acts of provocation and futile attempts to put pressure on North Korea.
US ambassador to the United Nations (UN) Nikki Haley has urged the 15-member UN Security Council to enforce the strongest possible measures to deter North Korean leader Kim Jong-un and shut down his trading partners.
However, Russian President Vladimir Putin believes that sanctions would not be enough to restrain the country. He also cautioned against getting emotional over the matter and to avoid methods that might further worsen the situation.