Rising geopolitical tensions push Asian shares downward

Amidst a scenario of rising geopolitical tensions, equities in Asia traded lower during Tuesday’s trade as investors turned to safe haven assets. Japan’s Nikkei 225 dropped 0.81% after a North Korean missile flew over the country early on Tuesday. Japanese Prime Minister Shinzo Abe said in a statement that the launch was reckless and unprecedented.
 
Across the Korean Strait, the Kospi tumbled 1.15% as investors processed the latest developments on the peninsula. The broader Nasdaq traded lower by 0.41%. The Australian index S&P/ASX 200 declined 0.94% with the financials and consumer discretionary sub-indices leading losses. The Hang Seng index fell 0.77%. On the mainland, the Shanghai Composite shed 0.08% and the Shenzhen Composite was off by 0.03%.
 
There is a rising demand for traditional safe haven assets following the latest provocation from North Korea, with demand for gold and the Japanese yen picking up in the aftermath of the missile launch. Meanwhile, the Japanese currency strengthened to trade as high as 108.32 yen to the dollar, its strongest levels in about four months, compared to levels around the 108.8 handle seen overnight. The yen later gave up some of those gains to trade at 108.67 yen to the dollar at 9:32 am HK/SIN.
 
The US equities on Tuesday traded lower after tropical storm Harvey forced refineries in Houston, Texas to shut down. The Dow Jones Industrial average fell 5.27 points to close at 21,808.40, with insurance giant Travelers contributing the most to the index losses. The 30-stock index traded higher earlier in the session.
 
The S&P 500 traded between gains and losses before closing at 2,444.24, with healthcare leading six sectors higher. The Nasdaq Composite outperformed, rising 0.3% to close at 6,283.02. The Dow, S&P and Nasdaq were all down during the month as investors grappled with worries about US’ President Donald Trump administration’s ability to move forward with the proposed tax reform.