Asian equities traded mostly higher in early Monday trade despite heightened geopolitical tensions after a missile strike on a Syrian airfield last Friday ordered by President Donald Trump and a move by the U.S. military to send an aircraft carrier group near the Korean Peninsula in response to recent provocations by North Korea .
Trump said the strike targeted an airbase responsible for launching a chemical attack in northeast Syria earlier last week. The attack was launched while Trump was hosting Chinese President Xi Jinping at his Florida resort.
Following the U.S. missile strike, Russia warned of “extremely serious” consequences even though an analyst says the countries are unlikely to further escalate tensions.
North Korea responded to the strike by stating that it was a justification for its own nuclear weapons program, adding that it had to protect itself against Washington’s “reckless moves for a war.” In turn, a U.S. Navy strike group is expected to move near the western Pacific Ocean and close to the Korean peninsula following North Korea’s multiple nuclear missile test launches this month.
The Kospi was down by 0.31 percent, with China-exposed stocks pressured following heightened tensions in the Korean peninsula. Shares for Lotte Shopping, the retail arm of conglomerate Lotte, plunged 2.04 percent in early trade.
Shares of LG Electronics fell by 1.55 percent despite an offer from Google to invest a minimum of $1 trillion won ($880.29 million) in LG Display, the LCD manufacturing arm of the LG Corporation. The investment would assist in increasing the production of organic light-emitting diode (OLED) screens for Google’s Pixel line of smartphones, the Electronic Times reported.
Stateside, U.S. equities closed flat in reaction to the missile strike, with the S&P 500 shedding 0.08 percent to 2,355.54 points, the Dow Jones industrial average tracking lower by 0.03 percent to close at 20,656.10 and the Nasdaq down by 0.02 percent to finish at 5,877.81. This was also on the back of a mixed jobs report, which saw just 98,000 jobs added in March, below expectations of 180,000 new jobs.
“Now that the U.S. nonfarm payroll is over, traders are going to put their focus back on the Fed, who have been talking about winding down their balance sheet. The Fed need to be very careful in their approach of conveying their message while they release their purchased bonds back on the market,” Think Markets chief market analyst Naeem Aslam said in a note.
The dollar was higher against a basket of currencies at 101.230 at 8:10 am HK/SIN time, its highest level in nearly 3 weeks. The dollar/yen traded at 111.29, higher compared to levels around 110.86 seen last week while the Aussie was softer at $0.7503, versus the $0.76 handle seen last week.
In corporate news, miner Rio Tinto reported paying $4 billion in taxes and royalties last year after it was ordered to pay an extra $284 million with interest due to its operations in tax-friendly destinations. The news comes as the Australian Taxation Office paid greater attention to the amount of taxes paid by multinational corporations based in Australia.
In Japan, the February un-adjusted current account balance surplus jumped to the largest since March 2016 at 2.814 trillion yen, compared to 2.616 trillion yen seen.
Other economic data expected today includes Australia February home loans and outstanding loan growth for the month of March from China later in the day.