HONG KONG (MarketWatch) — Japanese stocks soared Monday as the yen’s slide helped the market stand tall, even while some other Asian equities suffered from a cocktail of worries over the spread of bird flu in China, downbeat U.S. jobs data and North Korea’s aggression.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.13% jumped 2.8% to end at 13,192.59, while gains for some mining stocks helped Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.04% post a modest 0.3% advance from two-month lows.
China’s Shanghai Composite /zigman2/quotes/206600939/delayed CN:000001 -3.42% skidded 0.6% as the market reopened after a four-day weekend amid heightened worries over the spread of a new strain of bird-flu virus.
Taiwan’s Taiex slumped 2.4%, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.15% ended marginally lower, and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -0.93% fell 0.4%.
“The avian flu may have limited impact on economic growth, while it could cause future food-price inflation if more supply is cut. But this incident may hurt investment sentiment in the very near term,” Citigroup strategists Minggao Shen and Ben Wei wrote to clients in a report Monday.
They said that while the insurance sector “may face earnings pressure” amid worries over the spread of the H7N9 virus, airlines, consumer staples and retail sectors could also be potentially affected.
On the other hand, the health-care and auto sectors might benefit, they said.
Airline stocks in particular fell across most of the region, reflecting fears that tourist flows into and from China may be affected. In Shanghai, Air China Ltd. /zigman2/quotes/203341301/delayed CN:601111 -4.40% /zigman2/quotes/207207351/delayed AIRYY -1.85% skidded 3.4% and China Southern Airlines Co. /zigman2/quotes/210515916/delayed CN:600029 -3.74% /zigman2/quotes/206691352/composite ZNH -2.47% shed 2.6%.
Elsewhere in the region, China Airlines Ltd. /zigman2/quotes/201312776/delayed TW:2610 -0.11% dropped 6% and Eva Airways Corp. /zigman2/quotes/201931159/delayed TW:2618 0.00% slumped 6.8% in Taipei, Qantas Airways Ltd. /zigman2/quotes/205534063/delayed AU:QAN +0.75% /zigman2/quotes/200387630/delayed QUBSF -3.89% fell 1.4% in Sydney, and Korean Air Lines Co. /zigman2/quotes/200075101/delayed KR:003490 -4.15% declined 2% in Seoul.
What’s end game for North Korea?
The Rand Corporation’s Scott Harold discusses China’s strategic interests in North Korea and what North Korea hopes to achieve by escalating regional tensions.
But in Hong Kong, airlines saw some relief buying after taking a heavy hit Friday, with Air China /zigman2/quotes/203408003/delayed HK:753 +0.15% adding 4.5%, and Cathay Pacific Airways Ltd. /zigman2/quotes/203532437/delayed HK:293 +0.59% /zigman2/quotes/208114856/delayed CPCAY +0.65% advancing 4.1%.
At the same time, drug-maker shares advanced in China, with Harbin Pharmaceutical Group Co. /zigman2/quotes/202194507/delayed CN:600664 +2.27% adding 1.6%, and Kangmei Pharmaceutical Co. /zigman2/quotes/202371652/delayed CN:600518 -4.97% up 1.4%.
Meanwhile, Moody’s Investors Service said Monday that North Korea’s recent belligerent actions were credit-negative for South Korea “because they have increased the chance of a serious military clash.”