Asian Markets Decline as South and North Korea Tension Resumes

South Korean stocks dropped in Thursday afternoon trade as tensions on the Korean Peninsula reignited.

The Kospi in South Korea dropped more than 2% in afternoon trade.

The moves came following reports that South Korea’s defense ministry said North Korea had killed a missing official from the South earlier this week. It marked the first time since July 2008 that a South Korean civilian has been shot dead in North Korea, according to South Korean news agency Yonhap.

Shares of South Korean defense firm Victek soared more than 21% following the announcement, while North Korea exposed stocks Hanil Hyundai Cement and Hyundai Elevator slipped 1.97% and 0.75%, respectively.

Elsewhere, other Asia-Pacific markets also saw losses, following an overnight drop on Wall Street.

Hong Kong’s Hang Seng index fell 1.78%. Mainland Chinese stocks slipped, with the Shanghai composite down 1.46% while the Shenzhen component declined 1.915%.

The Taiex in Taiwan dropped 2.2%. In Japan, the Nikkei 225 fell 0.89% while the Topix index shed 0.8%.

Over in Australia, the S&P/ASX 200 declined 1.09%. Overall, the MSCI Asia ex-Japan index fell 1.72%.

Technology stocks in Asia took a hit in Thursday trade, following losses seen by their counterparts stateside.

In Japan, conglomerate Softbank Group saw its stock drop 3.59%. Kakao in South Korea also fell 3.15%. In Hong Kong, shares of Chinese smartphone maker Xiaomi slipped 4.65% while Tencent declined 1.46%, with the Hang Seng Tech index falling 3.02%.

Meanwhile, Taiwan Semiconductor Manufacturing Company shares in Taiwan shed 2.08%.

The tech heavy Nasdaq Composite has fallen 9.7% so far this month as investors rotate out of the sector. Big Tech stocks like Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft are all down at least 11% in September.

Shares of Australia’s Westpac were down 0.98%, with the lender announcing Thursday it had reached an agreement with financial crime agency AUSTRAC to pay a record 1.3 billion Australian dollar (approx. $920 million) fine, according to Reuters.

The settlement came following a lawsuit from AUSTRAC accusing Westpac of enabling millions of payments to people exploiting children, Reuters reported. Shares of other major Australian banks such as Commonwealth Bank of Australia and Australia and New Zealand Banking Group were mixed.

Overnight on Wall Street, the Dow Jones Industrial Average fell 525.05 points, or 1.9%, to close at 26,763.13. The S&P 500 slipped 2.4% to finish its trading day at 3,236.92 while the Nasdaq Composite dropped 3% to close at 10,632.99.

In coronavirus developments, Johnson & Johnson said Wednesday it has begun its phase three trial testing its potential coronavirus vaccine. The firm is the fourth drugmaker backed by U.S. President Donald Trump’s administration’s Covid-19 vaccine program, Operation Warp Speed, to enter late-stage testing.

Oil prices were lower in the afternoon of Asian trading hours, with international benchmark Brent crude futures down about 1% to $41.35 per barrel. U.S. crude futures also slipped 1.3% to $39.41 per barrel.

The U.S. dollar index, which tracks the greenback against a basket of its peers, sat at 94.405 following its rise from levels below 93 this week.

The Japanese yen traded at 105.43 per dollar after weakening from levels around 105 yesterday. The Australian dollar was at $0.7045 after falling yesterday from above $0.712.

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