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Asia: Stocks decline, led by industrials, after Brussels attacks

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[SINGAPORE] Asian stocksretreated, after the regional benchmark index closed Tuesday at the highest level since January, as industrial and raw-materials shares slumped in the wake of the deadly terrorist attacks in Brussels.

The MSCI Asia Pacific Index fell 0.2 per cent to 129.52 as of 9:18 am in Tokyo. Two bombs went off in rapid succession at the Brussels airport and an explosion an hour later hit a subway station a short walk from the EU's headquarters. Terrorist incidents including the one in Paris last November as well as the London bombings in 2005 spurred equity selloffs that were erased in the following days and weeks.

"This is a reflection of broader geopolitical risks out there," Chris Green, an Auckland-based strategist at First NZ Capital Group Ltd, a brokerage and wealth management firm, said by phone.

"Usually such attacks will have only a short-term impact. Investors' focus remains on macro economic fundamentals and we do need to see more signs of sustainability in the US economy and some stability in the Chinese data. I'm somewhat cautious given the recent rally we've seen."

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Japan's Topix index added 0.3 per cent, heading for a second day of advance, as the yen traded near a one-week low against the US dollar.

South Korea's Kospi index slipped 0.1 per cent.

New Zealand's S&P/NZX 50 Index added 0.1 per cent.

Australia's S&P/ASX 200 Index dropped 0.6 per cent. Markets in China and Hong Kong have yet to start trading.

The FTSE China A50 Index futures gained 0.4 per cent in most recent trading, while those for the Hang Seng Index added 0.2 per cent. The Shanghai Composite Index slipped 0.6 per cent on Tuesday, after posting its longest rally since last May and closing at its highest level since Jan 12 on Monday.

The Shanghai gauge has rebounded 13 per cent from a January low amid signs of state-fund buying during this month's National People's Congress and as policy makers loosened controls on margin lending. Recent media reports citing People's Bank of China governor Zhou Xiaochuan as encouraging individuals to invest personal savings in the stock market were "misinterpretations," the central bank said in a Weibo post.

E-mini futures on the Standard & Poor's 500 Index were little changed on Wednesday. The US equity benchmark index slipped 0.1 per cent on Tuesday. Most US stocks retreated as investors dived into haven assets including gold and the US dollar after the terrorist attacks in Brussels.

The Stoxx Europe 600 Index pared a drop of as much as 1.6 per cent Tuesday to close down 0.2 per cent.

Europe's leaders pledged a united front against Islamic State after the bomb attacks that killed at least 31 people in Brussels, but the jihadist group's latest and powerfully symbolic strike may only widen the continent's divisions.

BLOOMBERG

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