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Asian shares slip on Korea tensions
AFP - Tuesday, December 21
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Asian shares slip on Korea tensions
HONG KONG (AFP) - – Rising tensions on the Korean peninsula hit Asian stocks on Monday with markets in Seoul and Tokyo sinking as the South decided to press ahead with a live-fire artillery drill.
Traders were wary that the exercise would provoke an aggressive response from the North and had already prompted an emergency session of the UN Security Council at the request of Russia.
Seoul ended down 0.30 percent, or 6.02 points, at 2,020.28 and Tokyo fell 0.85 percent, or 87.42 points, to 10,216.41.
However, earlier losses were pared and the won bounced back from previous falls on reports that US negotiator Bill Richardson had managed to persuade Pyongyang to permit the return of UN nuclear inspectors as part of a package of measures to ease tensions.
Hong Kong slipped 0.33 percent, or 75.77 points, to 22,639.08 as the banking sector was hit by lingering concerns over European debt levels and a possible rate hike in China. Shanghai tumbled 1.41 percent, or 49.18 points, to 2,852.92 on the rate worries.
Sydney fell 0.56 percent, or 26.5 points, to 4,736.6.
Seoul began the US-backed tests in the afternoon on the South's island of Yeonpyeong, which Northern forces shelled last month, killing four South Koreans, two of them civilians.
The military had told civilians on five South Korea border islands to take shelter.
Some profit-taking added to selling pressure after recent gains, with trade sluggish as foreign investors took to the sidelines ahead of Christmas holidays, brokers said.
"There is a tendency for downward corrections when the market momentum is sluggish with foreign investors away," Kenichi Hirano, operating officer at Tachibana Securities, told Dow Jones Newswires.
Shares in Shanghai were sent tumbling as lingering fears China will hike interest rates to tame inflation hit property developers.
The sector was also concerned prices could fall and supply grow after the Ministry of Land and Resources Sunday urged local authorities to take measures to curb rising land prices and maintain a stable supply of land for residential use.
On currency markets the won rose against the dollar, rebounding from a one-month low earlier in the day, as dealers welcomed the North's agreement with Richardson.
The greenback fell to 1,161.80 won, down from 1,172.30 earlier Monday.
The euro was hit by concerns over European sovereign debt after Moody's Investors Service Friday cut its credit rating on Ireland by five notches, citing uncertainties over its economy and public finances.
In early European trade the single currency fell to 1.3162 dollars from 1.3185 in New York late Friday and to 110.39 yen from 110.78 yen. The dollar edged down to 83.88 yen from 83.94 yen.
Ireland's downgrade came a day after European leaders agreed to set up a permanent financial stability mechanism from 2013 to shore up the euro amid fears Portugal and Spain may need bailouts after Irish and Greek rescues.
But there was no decision to increase its size beyond the bloc's temporary 750 billion euro fund or allow it to purchase government bonds, or introduce a common European bond, John Kyriakopoulos of National Australian Bank noted.
"As such, European sovereign debt concerns are likely to linger into the New Year," he wrote in a note, adding investors needed to watch European bank funding costs.
On oil markets New York's main contract, light sweet crude for delivery in January, rose seven cents to 88.09 dollars per barrel in the afternoon on its last trading day.
Brent North Sea crude for February delivery gained nine cents to 91.76 dollars.
Gold closed at 1,385.00-1,386.00 US dollars an ounce in Hong Kong, up from Friday's close of 1,375.00-1,376.00.
In other markets:
-- Singapore closed down 0.64 percent, or 20.05 points, at 3,132.96.
Singapore Airlines gained 0.66 percent to 15.18 while Wilmar International slipped 1.00 percent to 5.95.
-- Taipei fell 0.56 percent, or 49.18 points, to 8,768.72.
Taiwan Semiconductor Manufacturing Company slipped 2.33 percent to 71.2 Taiwan dollars while computer maker Acer rose 0.89 percent to 91.0.
-- Jakarta fell 0.36 percent, or 12.75 points, to 3,568.81.
Bank Rakyat shed 2.4 percent to 10,000 rupiah, Bank Mandiri lost 2.3 percent to 6,250 and carmaker Astra rose 1.9 percent to 51,250 rupiah.
-- Kuala Lumpur edged down 0.27 percent, or four points, to 1,495.88.
Telekom Malaysia was unchanged at 3.38 ringgit and Sime Darby edged down 0.57 percent, to 8.70 while food and beverage company Nestle slid 2.5 percent to 42.02.
-- Manila rose 0.49 percent, or 19.73 points, to 4,077.06.
Top-traded Cebu Air rose 0.19 percent to 106.20 pesos while Metropolitan Bank gained 4.04 percent to 64.40 pesos. San Miguel Corp. surged 6.79 percent to 149.50 pesos.
-- Wellington fell 0.76 percent, or 25.15 points, to 3,299.96.
NZOG, the largest stakeholder in the Pike River colliery where 29 miners died in a series of explosions last month, fell 2.3 percent to 84 New Zealand cents, Fletcher Building was flat at 7.73 dollars and Air New Zealand rose 1.4 percent to 1.49.
-- Bangkok fell 1.56 percent, or 15.95 points, to 1,006.51.
Banpu shed 14.00 baht to 782.00, while Siam Cement lost 11.00 baht to 329.00.
-- Mumbai closed up 0.12 percent, or 24.03 points, at 19,888.88.
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