Asian markets close lower on continued geopolitical tensions


  • Business
  • Saturday, 01 Mar 2003

BY K.P. LEE

STOCK markets across Asia moved aimlessly yesterday amid continued geopolitical tensions to close lower on the week. Although some made modest gains on the day, they all ended the week between 0.9% and 4.7% lower than on Monday.  

Analysts said Wall Street’s 1% rebound on Thursday and Iraq’s reluctant agreement to destroy its al-Samoud 2 missiles were not enough to overcome the air of uncertainty prevailing in Asia as elsewhere around the world.  

Meanwhile, oil prices, which in New York trading on Thursday rose to nearly US$40 a barrel, perilously close to the October1990 all-time high of US$41.15, fell back to US$37.20 at the close as the terror alert in the US was lowered to “yellow” from “orange,” calming sentiment somewhat on the New York Mercantile Exchange. 

The news of Iraq’s agreement to scrap its missiles yesterday had initially buoyed sentiment in Tokyo, lifting the Nikkei in morning trade. The yen too, which had strengthened significantly against the US dollar during the week, eased slightly back to 117.73 yesterday, giving major Japanese exporters a little, but not much, more breathing room.  

Trading was brisk for shares in Sega Corporation, which rose 15% to 740 yen after The Wall Street Journal reported that Microsoft Corp and Electronics Arts were considering bidding for the video games maker.  

Overall, however, the Nikkei 225 retraced much of its early gains and ended the day only marginally up at 8,363.04, which represented a loss of 1.77% in its value since the start of the week.  

The Seoul stock market ended the week more jittery than most other Asian markets as South Korean authorities confirmed US accounts that North Korea was reactivating its Yongbyon nuclear reactor. The Kospi index closed at 575.43 yesterday, down 1.21% on the day and lower by 4.67% for the week -- the worst performance among Asian markets.  

Hong Kong’s Hang Seng Index also fell, closing 0.13% lower on the day and 1.39% for the week to 9,122.66. The Singapore market was the best performer yesterday with the Straits Times Index rising almost 1% to 1,273.85 points. For the week, however, it was the region's second worst performer with a loss of 3.13%.  

The KLSE fell back yesterday after Thursday's small rally, with counters like Telekom Malaysia Bhd, Tenaga Nasional Bhd, Petronas Dagangan Bhd and Petronas Gas Bhd coming under selling pressure. 

Analysts said geopolitical uncertainties appeared to have negated the positive news on the earnings front from major companies including Maxis Communications Bhd, which posted an impressive pre-tax profit of RM1.28bil on Thursday.  

The KLSE Composite Index closed 0.86% lower at 646.8 on the day and was down 1.18% for the week. 

For the latest KLSE indices and other information click here

 

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