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Wall Street Decline Impacts Asian Markets Differently

Web Desk (November 8, 2017): Asian stocks were mixed Wednesday after Wall Street declined as President Donald Trump delivered a new warning to North Korea in a speech to South Korean lawmakers.

The Shanghai Composite Index gained 0.1 percent to 3,417.98 and Japan’s Nikkei 225 fell 0.4 percent to 22,853.46. Hong Kong’s Hang Seng added 5 points to 28,998.07 and Sydney’s S&P-ASX 200 lost 0.5 percent to 8,685.07. Seoul’s Kospi gained 0.4 percent to 2,556.82 and Malaysia also advanced. New Zealand, Singapore, Taiwan and Jakarta retreated.

US stocks slipped as smaller companies and banks took their worst losses in a few months as interest rates moved lower. With stock indexes near record highs, investors moved some money into big-dividend stocks like real estate companies.

Small, domestically-focused companies had their worst day since mid-August as House Republicans began making changes to their tax bill. The Standard & Poor’s 500 index dipped 0.49 points to 2,590.64. The Dow Jones industrial average added 8.81 points to 23,557.23, another record high. The Nasdaq composite fell 0.3 percent to 6,767.78.

US President Donald Trump’s “do not try us” warning to North Korea in a speech to South Korea’s National Assembly has drawn comments from stock market analysts. Trump is on a 12-day Asia tour.

Pro- and anti-Trump protesters staged rallies in Seoul ahead of his visit, reflecting a public deeply divided along ideological and age lines. Many South Koreans worry Trump’s fiery rhetoric on North Korea raises the risk of war that could cost thousands of South Korean lives. Trump planned to fly to Beijing later in the day.

Commenting on Trump’s warning to North Korea analysts said that mMarkets seem unsure which way to go next- equity markets are largely becalmed, FX is mostly directionless, with a few exceptions, and the same too goes for bond markets. We still wait more progress on the U.S. tax reform bill.

Another analyst said that President Trump seems to be learning to play a more diplomatic game, as he leaves Seoul today for China on his Asia roadshow and does not appear to have set off any fireworks, either figuratively or literally on the Korean peninsula. First, though, he has to address the Korean National Assembly, where he is not guaranteed a polite and quiet hearing.

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