Asian stocks slump as investors worry about North Korea bomb test

HONG KONG - Most Asian stock markets declined Wednesday after a possible nuclear test in North Korea unnerved investors and a poor Chinese economic report dampened sentiment.

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KEEPING SCORE: Japan's benchmark Nikkei 225 index lost 1.2 per cent to 18,151.77 and South Korea's Kospi slid 0.7 per cent to 1,916.21. Hong Kong's Hang Seng fell 1 per cent to 20,981.21 but the Shanghai Composite Index in mainland China rose 0.5 per cent to 3,304.06. It had slumped 6.9 per cent on Monday and 0.3 per cent on Tuesday. Australia's S&P/ASX 200 slumped 1.6 per cent to 5,101.80.

NUCLEAR TEST: An "artificial earthquake" has been detected near North Korea's main nuclear test site, South Korean officials said. It's a strong indication that nuclear-armed Pyongyang had carried out an atomic test, which is likely to raise tensions in the region and make investors more cautious and less willing to place risky bets. South Korean government officials couldn't immediately confirm whether it was a nuclear blast or natural earthquake that had taken place while North Korea said it planned an "important announcement" later Wednesday.

SERVICE SLIDE: A monthly survey of China's service industries slipped to a 17-month low, renewing fears among investors that the world's No. 2 economy was facing stronger headwinds. The Caixin/Markit survey of service industry purchasing managers slipped to 50.2 in December from 51.2 the previous month. The index is based on a 100-point scale with numbers above 50 indicating expansion. China's service sector has helped offset weakness in trade and investment as the economy undergoes a painful slowdown, but the latest figures show momentum is slowing.

CHINA MEASURES: The stock market in China itself steadied further after news that Beijing would keep market steadying measures in place. A report in the Shanghai Securities News said the government would keep in place rules preventing shareholders who own more than 5 per cent of a company from selling off their stakes until new rules come into effect. Analysts had expected selling pressure to resume after the week ended because the six-month-old ban was due to expire.

WALL STREET: Major U.S. benchmarks ended Tuesday with tiny gains. The Dow Jones industrial average gained 0.1 per cent to close at 17,158.66 and the Standard & Poor's 500 edged up 0.2 per cent to 2,016.71. The Nasdaq composite fell 0.2 per cent to 4,891.43. Australia's S&P/ASX 200 slumped 1.2 per cent to 5,121.50.

ENERGY: Crude futures stabilized, with benchmark U.S. oil adding 4 cents to $36.01 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 79 cents, or 2.1 per cent, to settle at $35.97 a barrel on Thursday as demand appeared to weaken because of large global stockpiles. Brent crude, a benchmark for international oils, fell rose 8 cents to $36.50 a barrel in London.

CURRENCIES: The dollar slipped to 118.45 yen from 119.13 yen in the previous day's trading. The euro strengthened to $1.0766 from $1.0744.


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