Asian Markets Rebound as Iraq Fears Wane
Asian markets opened up Monday following widespread falls last week as investors took heart from Wall Street shrugging off fears over instability in Iraq and Ukraine.
Tokyo rebounded 2.26 percent in early morning trade, making up much of the 3.0 percent dip it suffered Friday after U.S. President Barack Obama's announcement that he had authorised air strikes in Iraq.
Other regional markets followed suit, with Hong Kong up 0.77 percent at the open, Sydney rising 0.58 percent, Seoul adding 0.46 percent and Shanghai opening up 0.33 percent.
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 U.S. has been launching airstrikes against extremist militants besieging ethnic minorities in the country's north.
But U.S. markets shrugged off the escalation of violence, ending the week in the black with a big rally Friday.
The Dow Jones Industrial Average rose 0.37 percent, or 60.56 points to 16,553.93 by close of play while the tech-rich Nasdaq Composite Index added 0.42 percent, or 18.26 points to 4,370.90.
Analysts said Asian markets were still keeping a close eye on the global geopolitical situation, but added that investors were beginning to feel both the Ukraine and Iraq conflicts were de-escalating.
Over the weekend, Russia called for a humanitarian ceasefire in eastern Ukraine as Kiev's army shelled the main rebel bastion of Donetsk.
"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, and the risk-off events of the past two weeks may see upside risk as de-escalation spreads across the conflicts."
In the week ahead, investors will be looking for 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.
U.S. retail sales and industrial production for July will also be released later this week.
The dollar was at 102.12 yen in early Tokyo trade, compared with 102.06 yen in New York late Friday. The euro bought $1.3403 and 136.87 yen against $1.3416 and 136.93 yen.
Oil prices were higher. U.S. benchmark West Texas Intermediate for September delivery rose 21 cents to $97.86 while Brent crude for September gained two cents to $105.04.
Gold slumped to 1,306.91 an ounce by 0215 GMT compared to its three-week high of $1,322.92 an ounce on Friday.
Source: Agence France Presse
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