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Asian markets rise as North Korea tensions subside

Wednesday 03:25 BST

What you need to know

  • Asia stocks recover from North Korea jitters
  • Australian dollar rises on building data
  • Gasoline futures continue to rally

Overview

Asia Pacific equities were broadly higher on Wednesday as geopolitical concerns moderated after Donald Trump said “all options are on the table” in response to North Korea’s missile test on Tuesday. The market interpreted this as a measured response to the provocation.

Hot topic

“The world has received North Korea’s latest message loud and clear: this regime has signalled its contempt,” Mr Trump said in response to North Korea’s missile launch, which was one of its most aggressive actions in two decades.

North Korean state media said on Wednesday that North Korean leader Kim Jong Un had overseen the launch, quoting him as saying it was a “meaningful prelude to containing Guam”.

South Korea’s Kospi index edged up 0.1 per cent after closing 0.2 per cent lower in the previous session following North Korea’s missile launch.

Japan’s Topix was 0.4 per cent higher as all sectors excluding energy and utilities rose.

Australia’s S&P/ASX 200 was flat as financials fell 0.3 per cent. The telecoms sector slipped 5.3 per cent after Telstra shares lost as the company said its plan to securitise payments from the country’s state-backed broadband network had been rejected. Telstra shares slid 5.4 per cent.

In Hong Kong the Hang Seng index was up 0.8 per cent led by a 1.4 per cent rise for information technology stocks.

Haven assets lost some of their shine as the yen weakened against the greenback to ¥109.82 after touching a four-month high in the previous session. Gold was 0.2 per cent higher at $1,311.80, hovering at a nine-month high, down from the $1,326.08 peak on Tuesday.

Forex

The US dollar index, a measure of the greenback against a basket of peers, weakened 0.1 per cent to 92.326.

The Australian dollar extended gains against its US counterpart after building approvals fell less than expected for July. The Australian dollar was up 0.5 per cent at $0.7986.

The euro was flat at $1.1976 after breaking through $1.20 against the dollar on Tuesday.

Fixed income

The yield on the 10-year US Treasury was down 1.4 basis points at 2.143 per cent.

Commodities

Gasoline futures extended their rally, gaining 2.2 per cent at $1.8225 a gallon, a 9.4 per cent gain for the week as Tropical Storm Harvey continued to batter Texas.

US oil prices fell as refinery demand was hit in Texas with West Texas Intermediate down 0.2 per cent to $46.33 a barrel while Brent was 0.2 per cent higher at $51.88 a barrel.

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