Asian stocks fell for the first time in five days after a Malaysia plane was shot down over Ukraine and Israel sent troops into Gaza, spurring demand for haven assets.
The MSCI Asia Pacific Index declined 0.3% to 146.79 as of 8.07pm in Hong Kong (7.07pm Thailand time) as all of its 10 industry groups retreated, paring this week's advance to 0.6%. The regional gauge followed losses in Europe and the United States after Ukraine's government claimed pro-Russia rebels shot down the passenger jet over disputed territory, killing all 298 people on board. Equities in New York extended a retreat in the last hour of trading as Israel sent ground forces into Gaza.
"Geopolitical risks have resurfaced, sparking a selldown in global share markets and a flight to quality assets," said Matthew Sherwood, Sydney-based head of investment markets research at Perpetual, which manages about US$29 billion. "At present, details remain scarce with pro-Russian and Ukrainian forces subsequently blaming each other for the attack."
Japan's Topix index slid 0.8%. Taiwan's Taiex index, New Zealand's NZX 50 Index and South Korea's Kospi index all lost 0.1%. Australia's S&P/ASX 200 Index gained 0.2%. The FTSE Bursa Malaysia KLCI Index dropped 0.5%. Singapore's Straits Times Index rose 0.1%.
Hong Kong's Hang Seng Index fell 0.3% and the Hang Seng China Enterprises Index of mainland Chinese stocks lost 0.3%. The Shanghai Composite Index advanced 0.2%.
Malaysian Airlines flight MH17 was en route to Kuala Lumpur from Amsterdam when it disappeared from radar and crashed in eastern Ukraine, near the Russian border. Russian President Vladimir Putin blamed the Ukrainian government for the jet crash, while Kiev said pro-Russian rebels were behind the attack. The separatists denied the accusation.
Israel moved troops and tanks into Hamas-controlled Gaza, accompanied by heavy artillery shelling, marking the first significant Israeli ground operation in the area since 2009. It follows intensified aerial attacks in which more than 200 Gaza residents were killed. Palestinians launched some 1,250 rockets into Israel, killing one person, with many attacks intercepted by missile defenses.
"We expect this negativity to continue throughout the Asian trading day and into the European session tonight," said Evan Lucas, a market strategist at IG in Melbourne. "How hard the fall amounts to will depend on the reaction of Europe, Russia and the US over the coming week."
"Certainly, today's news of the aeroplane disaster in the Ukraine, of Israel moving into Gaza, this is not conducive to the investment climate that all of us need," Sam Walsh, chief executive officer of Rio Tinto Group, the world's second-biggest mining company, said on Friday at a B-20 forum of business leaders in Sydney.