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Asia close: Geopolitical headlines dampen sentiment, China real estate and HK casino operators in focus

Stocks in Asia Pacific failed to catch a bid despite the bounce put in by Wall Street overnight.
In part that may have been due to the latest geopolitical headlines dampening investor sentiment, with North and South Korea “trading missile tests” in the words of Jeffrey Halley, senior market analyst Asia Pacific at Oanda.

In parallel, Australia, the UK and the US announced a partnership to provide Sydney with nuclear-powered submarines.

That move was quickly decried by Chinese officials who claimed that it would undermine stability in the region.

On a more positive note, it was reported that China had reached a significant milestone on Thursday after fully vaccinating 1.0bn of its citizens.

Against that backdrop, the Shanghai Stock Exchange’s composite index fell 1.34% to 3,607.09, alongside a 0.62% drop for Japan’s Nikkei-225.

Notably, troubled real estate developer China Evergrande Group continued to be in sellers’ sights, retreating 6.41% on news that the wife of real estate mogul Joseph Lau had sold $11.2m-worth of shares in it.

Dollar/yen meanwhile was little changed, dipping 0.02% to 109.36.

Hong Kong stocks were also under the cost, with the Hang Seng falling 1.46% to 365.36, amid continued worries around Beijing’s looming crackdown on Macau casino operators.

Those sent shares of Wynn Resorts 6.3% lower by the close while Sands China dived 6.65%.

South Korea’s Kospi lost 0.74% to 3,130.09 and New Zealand’s S&P NZX All Index 0.39% to finish at 2,118.70.

Worth noting, leading South Korean opposition presidential candidate, Hong Joon-pyo, reportedly warned of a potential collapse in the housing market.

Meanwhile, losses in New Zealand came about despite figures showing that the nation’s gross domestic product expanded at a quarterly pace of 2.8% over the three months to June – more than doubling the consensus forecast.

Commenting on the data out of Auckland, Halley told clients that the New Zealand economy was overheating.

“The data will be tempered by the Q3 lockdowns, but the RBNZ should be locked-and-loaded for an October hike now, even if Auckland is still under restrictions.

“Only the delta-variant escaping Auckland and into the rest of the country will change that narrative.”

Australia was the chief exception to the wave of selling sweeping across the region, with the country’s All Ordinaries adding 0.47% to 7,759.78.

Benchmark indices in Singapore, Thailand and Vietnam also finished higher.

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