Asian stocks slump in the wake of U.S.-North Korea tension

Youkyung Lee, The Associated Press</span>
Published Friday, August 11, 2017 1:05AM EDT

SEOUL, Korea, Republic Of - Asian stock markets slumped on Friday following overnight losses on Wall Street as U.S. President Donald Trump's bellicose remarks prompted investors to unload shares in companies that have been on the rise in recent months.

KEEPING SCORE: South Korea's Kospi sank 1.8 per cent to 2,316.88 and Hong Kong's Hang Seng shed 1.5 per cent to 27,041.83. Shanghai Composite Index fell 0.7 per cent to 3,238.53. Australia's S&P/ASX 200 dropped 1.1 per cent to 5,696.80. Stocks in Taiwan, Singapore and other Southeast Asian countries were also lower. Japan was closed on a public holiday.

FIRE AND FURY: Keeping up his tough talk, Trump told reporters that Kim Jong Un's government should "get their act together" or face extraordinary trouble, and suggested his earlier threat to unleash "fire and fury" on North Korea was too mild. The remarks, following North Korea's earlier revelation of a plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, gave investors a reason to pocket profit in the sectors, such as technology, that have been the biggest gainers in recent months, analysts said.

ANALYST'S TAKE: "The tensions between North Korea and the U.S. is an excuse for profit-taking," Seo Sang Young, an analyst at Kiwoom Securities. "Had investors believed a real war was on the horizon, all sectors would have declined." He added that in China, the U.S. and South Korea, stocks that are showing the biggest declines since the rise of tensions between the U.S. and North Korea are the companies that have risen most since June.

WALL STREET: U.S. stocks closed lower on Thursday led by technology companies. The Standard & Poor's 500 index dropped 1.4 per cent to 2,438.21. The Dow Jones industrial average slid 0.9 per cent to 21,844.01. The tech-heavy Nasdaq composite lost 2.1 per cent to 6,216.87. The Russell 2000 index gave up 1.7 per cent to 1,372.54.

OIL: Benchmark U.S. crude lost 12 cents to $48.47 per barrel on the on the New York Mercantile Exchange. The contract fell 97 cents, or 2 per cent, to close at $48.59 a barrel on Thursday. Brent crude, used to price international oils, declined 23 cents to $51.67 per barrel in London. It slid 80 cents, or 1.5 per cent, to close at $51.90 per barrel on Thursday.

CURRENCIES: The dollar slipped to 109.05 yen from 109.20 while the euro weakened to $1.1763 from $1.1773.

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