9-26-17 6:29 AM EDT | Email Article

By Kenan Machado

Chinese firms follow slide by U.S. tech stocks

Equity markets in Asia closed mixed on Tuesday, as traders assessed fresh threats from North Korea and weakness among key technology stocks, though Hong Kong stocks erased early losses as Chinese markets outperformed.

North Korea's foreign minister warned overnight that his country would shoot down U.S. warplanes even if they were outside the nation's airspace, in an escalation of the threat of a military confrontation.

In the U.S., the White House dismissed assertions about war and the Pentagon brushed off the military threat.

In South Korea, the Kospi ended 0.3% lower, extending its losing run into a sixth straight day. Samsung Electronics (005930.SE) dropped 3.7%% and Korean Air Lines (003490.SE) fell 1.1%.

"The markets are cautious but yet to fully price in a flare up in military conflict," said Ivan Ip, a stock strategist at UOB Group. Trading sentiment was already bearish, given the Federal Reserve's plans to taper its balance sheet which should lead to tighter liquidity, he said.

Following an overnight slide in U.S. internet stocks, including Chinese firms like Baidu (BIDU) and Alibaba Group Holding (BABA) , Hong Kong heavyweight Tencent Holdings (0700.HK) ended Tuesday's session 1.2% lower. The Hang Seng Index , however, ended 0.1% higher.

Meanwhile, Hong Kong-listed Chinese developers and Apple suppliers -- which were down on Monday -- remained under pressure. AAC Technologies Holdings (2018.HK) lost 1.1%, while China Overseas Land & Investment (0688.HK) gave up 1%.

Chinese developers were weaker as local governments there rolled out new measures to cool the frothy property market.

"Given the strong performance of the [property] sector, I don't think it's a surprise that some investors moved to lock in some profits, especially in light of recent policy measures," said David Millhouse, head of research for China at Forsyth Barr Asia.

Elsewhere, Japan's Nikkei Stock Average finished 0.3% lower, dragged lower by overnight yen buying. The U.S. dollar fell to as low as Yen111.50, compared with around Yen112.22 at the end of Tokyo equity trading on Monday.

Tech stocks in Japan also faced selling pressure, with Sony (6758.TO) and Nintendo (7974.TO) down 2% and 1.9%, respectively.

Energy stocks in the region gained on the overnight return to bull-market territory for U.S. oil prices.

In Japan, Inpex Corp. (1605.TO) closed 1.7% higher and Japan Petroleum Exploration (1662.TO) put on 3.2%. Australia's Oil Search (OSH.AU) added 2.8%, Santos (SSLTY) added 3.5% and Woodside Petroleum (WPL.AU) advanced 2.9%.

Australia's S&P/ASX 200 ended 0.2% lower at 5,671.00.

 

(END) Dow Jones Newswires

September 26, 2017 06:29 ET (10:29 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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