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| Asian markets fall after deadly Boston Marathon blasts | Asian markets fall after deadly Boston Marathon blasts |
| (about 1 hour later) | |
| Asian markets have declined in early trading after two explosions at the Boston Marathon in the US killed three people and injured dozens more. | |
| Stock indexes fell by as much as 2% in Japan. South Korea and Australia also dropped, as did oil and gold prices. | |
| Earlier on Monday, US markets closed lower after the blasts accelerated a sell-off started by weak economic data. | |
| Analysts said that investors would be more risk averse in coming sessions and would focus on Asia's problem areas. | |
| "This is a kind of unknown-unknown event and a stark reminder that the world continues to remain unsafe," said Vishnu Varathan of Japanese bank Mizhuo. | |
| "While it has happened far away from Asia, it is likely to trigger concerns and fears over Asia's known-unknowns. | |
| "You have the Korean peninsula tensions, the territorial dispute between China and Japan, and other issues in the China Sea which all post risks if they flare up," he added. | |
| Risk aversion | |
| Faced with these problems, investors reacted to the news of the blasts by trying to cut risks, not least because in recent weeks stock markets in Asia have seen strong gains. | |
| Japan's Nikkei 225 index was recently trading 1.9% lower, while South Korea's Kospi was down 0.5% and Australia's ASX 200 shed 0.8%. | |
| Oil prices dropped, with US light crude down by 1.9%, and Brent crude sliding 1.6%. Gold continued to fall, extending Monday's 10% fall and continuing to hit its lowest levels in two years. | |
| By contrast, the Japanese yen gained against the US dollar because many investors see it as a less risky asset. | |
| "The developments in Boston are likely to trigger an initial reaction of caution," said Michael McCarthy, chief market analyst at CMC Markets. | "The developments in Boston are likely to trigger an initial reaction of caution," said Michael McCarthy, chief market analyst at CMC Markets. |
| The Japanese currency rose as much as 2.5% to 96.61 yen against the US dollar in New York on Monday. It also gained nearly 3% against the euro, rising as high as 125.98 yen against the single European currency. | |
| In the US, all three of the country's main stock indexes closed lower on Monday. The Dow Jones ended the day down 1.8%, while the S&P shut 2.3% lower and the Nasdaq shed 2.4%. | In the US, all three of the country's main stock indexes closed lower on Monday. The Dow Jones ended the day down 1.8%, while the S&P shut 2.3% lower and the Nasdaq shed 2.4%. |
| Asia's problems | |
| Analysts said the blasts had further dented investor morale, which had already been shaken by weaker than expected Chinese and US data. | |
| They also pointed to a number of potential Asian flashpoints that caused investors to be cautious, such as the heightened tensions on the Korean peninsula. | |
| North Korea has recently conducted a nuclear test, and in recent weeks it has also threatened to attack South Korea, Japan and US bases in the region. | |
| Meanwhile, the spat between China and Japan over a set of disputed islands in the East China Sea has flared up. The issue is yet to be resolved and continues to remain a bone of contention between Asia's two biggest economies. | |
| Analysts have often have warned that an escalation of any of these issues was likely to hurt the region's economic growth. | |
| "Asia is increasingly relying on intra-regional trade to sustain its economic growth," said Mr Varathan of Mizhuo | |
| "Any full-blown conflict between Asian nations will hurt trade and could adversely impact economic growth." |