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Shares in Asia trend weaker after deadly Manchester blast

Published 05/23/2017, 12:23 AM
Updated 05/23/2017, 12:24 AM
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Investing.com - Asian shares trended weaker on Tuesday after a deadly explosion at a concert venue in Manchester was said to be a terror attack with reports suggesting that the government is mulling rescheduling the June 8 polls for parliament.

At least 19 people were reported dead following a blast at the Manchester Arena in northern England where U.S. singer Ariana Grande had been performing, Reuters said.

FTSE futures eased to slightly to around 7,482.50 after the blast adn U.S. futures for the S&P 500 and the Dow also eased.

"There has been little response to this awful event by the FTSE futures markets. This reflects the market view that these terrorist events are now an ongoing risk. Each individual terrorist event is unlikely to lead to any significant disruption to commerce or financial markets," CMC Markets Chief Market Analyst Ric Spooner

Japan's Nikkei 225 dipped 0.05%, while Australia's S&P/ASX 200 fell 0.23%. South Korea's benchmark Kospi was flat and Hong Kong's Hang Seng Index rose 0.28%. The Shanghai Composite fell 0.10%.

In Singapore, shares of Noble Group slid 18.8% with a trading halt in force after S&P Global Ratings downgraded the commodity trader's credit rating to 'CCC+.' Reuters also reported that Sinochem had decided to stop pursuing a stake in the company due to Noble's shaky outlook.

Overnight, U.S. stocks closed higher on Monday, as investors shrugged off recent U.S. political turmoil, shifting attention to President Donald Trump’s first trip abroad since taking office, after he signed a nearly $110 billion weapons deal with Saudi Arabia.

Defense stocks spurred a rally on Wall Street amid confirmation that the United States sealed a multibillion arms deal with Saudi Arabia, bolstering the financial outlook for U.S. companies involved in manufacturing weapons, ships and aircrafts among other military equipment.

Trump’s first trip abroad since taking office comes against a backdrop of growing investor uncertainty over the Trump administration's ability to deliver on its initiatives to boost the economy, as Trump remained engulfed by allegations concerning links to Russia and his abrupt decision to fire former FBI chief James Comey.

The most damaging allegation – that Trump requested the-then FBI chief James Comey to stop an investigation into his former National Security Advisor Michael Flynn – caused U.S. equities to post their worst day of 2017 last week, as the Dow dropped 370 points.

Investors parsed comments from Fed officials on Monday, ahead of the release of the Federal Reserve minutes, scheduled for Wednesday, for clues about future monetary policy.

Both Philadelphia Fed President Patrick Harker and Federal Reserve Bank of Minneapolis President Neel Kashkari made a public appearance but the former did not speak on monetary policy while Kashkari said central bank interest policy can’t solve the all the economy’s problems.

"...We probably can't solve these problems [the disparities in the U.S. economy] with monetary policy." Kashkari said.

The Dow Jones Industrial Average closed at 20,894.83, up 0.43%. The S&P 500 closed 0.52% higher while the Nasdaq Composite closed at 6133.62, up 0.82%.

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