Channel NewsAsia

Asian markets rebound as Iraq fears wane

Asian markets rose Monday (Aug 11) following widespread falls last week, after Wall Street shrugged off fears over instability in Iraq and Ukraine.

HONG KONG: Asian markets rose Monday (Aug 11) following widespread falls last week, after Wall Street shrugged off fears over instability in Iraq and Ukraine.

Tokyo rebounded 2.38 per cent, closing up 352.15 points at 15,130.52 and making up much of the 2.98 per cent dip it suffered on Friday after US President Barack Obama's announcement that he had authorised air strikes in Iraq.

Hong Kong closed up 1.29 per cent, or 314.61 points, at 24,646.02 while Shanghai gained 1.38 per cent, or 30.22 points, to 2,224.65.

Other regional markets saw more modest gains. Sydney rose 0.40 per cent, or 21.7 points, to 5,457.0 while Seoul was up 0.41 per cent, or 8.27 points, to close at 2,039.37.

The dollar also rallied against the yen and euro after the unit plunged last week as investors snapped up the Japanese currency, seen as a safe haven in times of uncertainty and turmoil.

Last week ended on a sour note for most Asian markets as worried investors took fright from a ramping up of instability in Iraq, where the US has been launching air strikes against extremist militants besieging ethnic minorities in the country's north.

But US markets shrugged off the escalation of violence, ending the week in the black with a rally on Friday. The Dow Jones Industrial Average rose 0.37 per cent, or 60.56 points to end at 16,553.93. The tech-rich Nasdaq Composite Index added 0.42 per cent, or 18.26 points to 4,370.90.

'CONFLICTS COOLING'

Analysts said Asian market players were still keeping a close eye on the global geopolitical situation, but investors were beginning to feel both the Ukraine and Iraq conflicts were de-escalating.

"On an interim-term view, geopolitics remain at the forefront of investors' decision-making," wrote Evan Lucas at Melbourne-based IG Ltd in a note. The conclusions from the weekend "are that conflicts are cooling", he said.

But risks remain. Over the weekend Ukraine's army shelled the main rebel bastion of Donetsk, as Russia called for a humanitarian ceasefire which the West warned could be a pretext by Moscow to send in troops.

In the week ahead, investors will be watching economic health indicators from China. The world's second largest economy is due to release its latest industrial output, retail sales and fixed-asset investment figures on Wednesday. US retail sales and industrial production for July will also be released later this week.

In forex trade the dollar strengthened to 102.13 yen in Tokyo afternoon trade, against 102.06 yen in New York late Friday and 101.81 yen in Asia. The euro was quoted at US$1.3401 and 136.87 yen, slipping from US$1.3416 and 136.93 yen in New York.

Oil prices were mixed. US benchmark West Texas Intermediate for September delivery rose 15 cents to US$97.80 while Brent crude for September fell six cents to US$104.96.

Gold slumped to 1,306.60 an ounce by 0650 GMT compared to its three-week high of US$1,322.92 an ounce on Friday.

In other markets:

-- Manila closed 1.11 per cent higher, or 76.32 points, at 6,956.66.

Top-traded JG Summit Holdings Inc. gained 2.31 per cent to 53.20 pesos while Philippine Long Distance Telephone Co. rose 2.67 per cent to 3,080 pesos.

-- Wellington fell 0.11 per cent, or 5.57 points to 5,049.63.

Air New Zealand was down 0.26 per cent at NZ$1.935 while Spark was off 0.35 per cent at NZ$2.81.

-- Taipei rose 0.96 per cent, or 86.95 points, to 9,172.91.

Hon Hai Precision Industry added 1.46 per cent to NT$104.0 while Cathay Financial Holding was 1.24 per cent higher at NT$48.9.

-- Thai markets were closed for a public holiday

Tweet photos, videos and updates on this story to  @channelnewsasia