Asia: Markets sink after US launches Syria strikes

[HONG KONG] Asian stocks fell while safe havens rallied on Friday after the US launched missile strikes on Syria, fanning geopolitical concerns and raising the prospect of frictions with Russia.

Eyes are also on Florida as Chinese President Xi Jinping and Donald Trump kicked off a two-day meeting after the US tycoon's accusations that Beijing was killing US jobs and manipulating its currency to give it a trade advantage.

Mr Trump ordered a huge assault on the Shayrat Airfield in Syria in retaliation for a chemical attack with a sarin-like nerve agent that Washington blamed on President Bashar al-Assad.

The attack came just hours after Russia warned that there could be "negative consequences" if the US took military action against Syria, which it is backing in a civil war.

The news sent Asian markets, which had been mostly in the black, into reverse and safe-haven assets such as the yen and gold soaring. Oil prices surged almost two percent.

"Everything risk-on went risk-off really quick," James Audiss, Sydney-based senior wealth manager at Shaw and Partners, told Bloomberg News. "It's a flight to safety."

Hong Kong plunged 1.1 per cent, Shanghai slipped 0.2 per cent, Sydney fell 0.3 per cent and Seoul was 0.4 per cent off.

Tokyo ended the morning 0.1 per cent lower as the soaring yen - which was sitting at lows not seen since November - hit exporters.

TRUMP, XI MEET

Gold prices, which along with the yen are considered safe bets in times of turmoil and uncertainty, also jumped more than one percent to US$1,266.

Oil prices, which had been lower in early morning trade, jumped as the attacks led to concerns about supplies in the Middle East.

"Syria is not a big oil producer but it does potentially increase the risk of escalation in the whole region," Ric Spooner, chief market analyst at CMC Markets in Sydney, said. "We're seeing a risk response to the airstrike."

The attacks on Syria overshadowed talks in Florida between Mr Trump and Mr Xi, which are being closely monitored by investors worried that the former reality TV star's anti-globalisation comments could spark a trade war between the economic superpowers.

Also on the agenda is the North Korea problem, with Washington concerned about the country's growing nuclear programme following a series of missile launches, the most recent coming this week.

As the two leaders met, Mr Trump told reporters he thought they would have "a very, very great relationship and I look very much forward to it".

AFP