Asia report: Most markets lower as Pyongyang blusters

Most markets in Asia finished lower on Friday, as Pyongyang blustered that it was considering testing a nuclear weapon in the Pacific Ocean.

In Japan, the Nikkei 225 was down 0.25% at 20,296.45, as the yen strengthened 0.43% on the dollar, last trading at JPY 112.

On the mainland, the Shanghai Composite lost 0.15% to 3,352.87, as the smaller, technology-heavy Shenzhen Composite was 0.34% softer at 1,988.60.

China’s markets were under pressure after Standard & Poor’s downgraded the country’s sovereign credit rating to A+ from AA-, with credit growth on the mainland seen as the primary risk.

The downgrade from S&P put that agency in line with Fitch and Moody’s.

South Korea’s Kospi was down 0.74% at 2,388.71, while the Hang Seng Index in Hong Kong ended the session 0.82% lower at 27,880.53.

Blue chips were mixed after starting strong, with Posco falling 3.16%, SK Hynix ending flat and Samsung Electronics ahead 0.38%.

On the geopolitical front, the Korean peninsula was at the top of the agenda once again after US President Donald Trump attempted to pile the pressure on Pyongyang.

Trump granted the US Treasury more authority to target businesses and people seen to be having commercial relations with the hermit state.

In response, North Korean leader Kim Jong-un said the United States would “pay dearly” for Trump’s rhetoric.

Oil prices were higher during Asian trading, with Brent crude last up 0.14% at $56.51 per barrel and West Texas Intermediate adding 0.16% to $50.63.

In Australia, the S&P/ASX 200 was ahead 0.47% at 5,682.14, with the weighty financials subindex ending the day up 0.92%.

Across the Tasman Sea in New Zealand, the S&P/NZX 50 was 0.3% firmer at 7,814.78, on the last trading day before the country’s general election.

The polls had already been open for two weeks, with a preliminary result expected within a few hours of them closing at 0800 BST on Saturday.

Recent polls had the Labour-led left and National-led right blocs neck-and-neck, with the populist and nationalist New Zealand First party expected to be ‘kingmakers’ in forming a government.

No single party has ever formed a majority government under New Zealand’s mixed-member proportional voting system.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.47% at AUD 1.2553 and the Kiwi advancing 0.19% to NZD 1.3659.