The geopolitical fears in the Middle East dragged Asian equities lower for the second day in a row, as investors’ fears over the possibility of a military intervention in Syria. An air missile strike against the country is expected to come as soon as Thursday, security analysts warned.
Analysts warned that the ongoing conflict and development in shares could be a risk to the global market, with possible bigger trembles in the global market yet to come..
“Any potential change in the balance of power in Syria’s civil war poses a new uncertainty for financial and commodity markets, but it doesn’t immediately threaten the global economy. The losses were spread across sectors in multiple markets, with internationally exposed firms in Japan also suffering because of the stronger yen,” a Wells Fargo analyst Paul Christopher said in a note on Tuesday.
Asian Equities – Conflict in Syria
The geopolitical instability in the Middle East, especially in Syria and Egypt added to the firming safe-haven yen, as the strong yen hurts Japanese exporters.
A group of nations including US, UK, France and Canada hinted they are considering military intervention on suspicion that the chemical weapons may have been used against civilians by the Syrian government.
“This is not about wars in the Middle East; this is not even about the Syrian conflict,” British Prime Minister David Cameron said yesterday. “It’s about the use of chemical weapons and making sure, as a world, we deter their use,” he added.
Earlier this week, the US Defense Secretary Chuck Hagel said that the military may have to intervene and take action against the Syrian government.
The Japanese benchmark Nikkei 225 fell 1.51% to 13,338.46 points. While shares in the region were hit by strengthened yen, dropping 0.23% to ¥97.24 at the time of writing.
Tokyo’s broader Topix index dropped 1.76% lower at 1.114.03 points.
Losses were seen in the session in China, with Hang Kong’s Hang Seng retreating 1.63% to 21,518.00 points and China’s mainland Shanghai composite lost 0.11% lower at 2,101.30 points.
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