Asian markets suffer bloodbath over escalating US, North Korea tensions

Increasingly bellicose talk between the US and North Korea prompted investors to take money off the table, while traders trimmed positions ahead of the weekend.
Increasingly bellicose talk between the US and North Korea prompted investors to take money off the table, while traders trimmed positions ahead of the weekend.PHOTO: AFP

SINGAPORE - Markets across Asia suffered a bloodbath on Friday (Aug 11) as investors bailed on fears that escalating tensions between the United States and North Korea may boil over into military confrontation.

Global markets have lost nearly US$1 trillion (S$1.36 trillion) since US President Donald Trump said on Tuesday (Aug 8) that North Korea "will be met with fire and fury like the world has never seen", and then dialed up his warning further on Thursday (Aug 10) by saying he was not tough enough this week.

Asian markets swooned from the opening bell, and closed in the red. Hong Kong slumped 2.04 per cent, Shanghai slipped 1.63 per cent, Korea shed 1.69 per cent, and Jakarta fell 1.03 per cent. Singapore shares also ended in negative territory as increasingly bellicose talk between the US and North Korea prompted investors to take money off the table, while traders trimmed positions ahead of the weekend.

The Straits Times Index sank 1.31 per cent or 43.52 points to 3,279.72, down 1.4 per cent for the week.

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Singapore banks led the decline, with DBS Group shedding 2.2 per cent or 46 cents to $20.80; OCBC Bank fell 12 cents or 1.1 per cent to $11.20; while United Overseas Bank Group lost 1.3 per cent or 33 cents to $24.20.

 
 

Wilmar International slipped 6.4 per cent or 22 cents to $3.20; and Hongkong Land lost 2.1 per cent or 16 US cents to US$7.34.

"It looks like a technical correction, but if there's more bad news in the days to come, or if geopolitical tensions escalate, this short-term correction could become a major correction for stock markets here and globally," CMC Markets analyst Margaret Yang said.

"Year to date, the markets are sitting on huge unrealised gains, so investors are taking profit now," she added.

City Developments fell 4.5 per cent or 53 cents to $11.14, after posting a 17.9 per cent fall in net profit for the second quarter and announced a new CEO designate after Grant Kelley resigned. He resigned on Thursday but will remain with the company until year-end.