HONG KONG: Asian markets rebounded to sit mostly higher on Wednesday as early nervousness over North Korea’s latest sabre-rattling gave way to bargain-buying following the previous day’s steep losses.
Traders ran for the sidelines in the morning after Washington confirmed that Pyongyang had for the first time tested a missile capable of reaching the United States, ratcheting up pressure on the already tense Korean peninsula.
But in the afternoon the selling and rush for safe-haven assets such as the Japanese yen reversed.
By the close Tokyo was up 0.3 percent, while Seoul also added 0.3 percent and Singapore jumped 0.8 percent. Hong Kong gained 0.5 percent in late trade after diving 1.5 percent Tuesday, and Shanghai ended 0.8 percent up. However Sydney finished 0.4 percent off while Wellington and Jakarta also edged down.
Despite the gains, dealers remain on edge and are now awaiting the next development after Russia and China issued a joint appeal to ease tensions while the United Nations Security Council will hold an emergency meeting later in the day.
The test came just as the US was preparing to celebrate Independence Day and days before a G20 summit, where it will likely top the agenda.
It was the latest provocation by North Korean leader Kim Jong-Un who is determined to develop a nuclear weapons programme he says is needed to ward off invasion.
South Korea and the US on Wednesday launched a barrage of missiles simulating a precision strike against Pyongyang, in response to the provocation.
“Traders and investors may be wondering what reaction this latest missile test will get,” said Greg McKenna, chief market strategist at AxiTrader.
Traders were given few leads with European markets slightly down and Wall Street closed for the July 4 holiday.
Tech firms saw some much needed buying after suffering a recent sell-off as global central banks consider tightening monetary policy.
The sector has been a huge beneficiary of the years of cheap borrowing from lenders, sending their stock prices soaring, but the prospect of an end to such largesse has led to profit-taking.
Hong Kong-listed Tencent edged up from Tuesday’s fall of more than four percent, while AAC Technologies also bounced and Sony jumped 0.8 percent in Tokyo.
Investors are awaiting the release Wednesday of minutes from the Federal Reserve’s June policy meeting and key US jobs data Friday