Update | Escalating North Korea tensions roil Hong Kong market
Investors turn back on equities and pile into safe-haven assets such as gold and Japanese yen as tension escalates on Korean peninsula
Hong Kong stocks closed lower on Monday for a third consecutive session, amid broader weakness in the region, as investors turned away from equities towards safe-haven assets after tension escalated on the Korean peninsula following North Korea’s sixth and most powerful nuclear test.
South Korea said on Monday it believed its northern neighbour was preparing to launch a ballistic missile following its most powerful nuclear test explosion over the weekend.
Early in the day, South Korea’s military conducted a live-firing exercise to simulate a strike on North Korea’s nuclear test site.
Tensions prompted investors to dump risky assets like equities and pile into haven assets, such as gold and the Japanese yen.
Hong Kong’s benchmark Hang Seng Index declined 0.8 per cent, or 212.9 points, to close at 27,740.26. The Hang Seng China Enterprises Index, known as the H-share index, fell 0.9 per cent, or 102.88 points, to 11,182.67. Daily turnover reached HK$87.7 billion.
Elsewhere in the region, Japan’s benchmark Nikkei Average dropped 0.9 per cent at 19,508.25, and its broader Topix index ended down 1 per cent at 1,603.55. South Korea’s Kospi lost 1.2 per cent, and Australia’s S&P/ASX 200 shed 0.4 per cent.