Seoul leads most Asia markets down after N Korea test

Hong Kong, Sep 9 (AFP) South Korean stocks and the won ledmost Asian markets lower today after the North conductedanother nuclear test, while trading was also hit by worriesover global central bank policy easing. Pyongyang said it had conducted a "successful" fifthnuclear test, which South Korea said was its largest-ever. The news intensified worries about geopolitical tensionsin the region as world powers including China struggle to reinin Pyongyang’s erratic behaviour. Seoul’s KOSPI was down 1.5 per cent in the afternoon whilea Bank of Korea decision not to cut interest rates was unableto prevent the won sinking 0.8 per cent. The losses led a sell-off around most of the region withSydney and Singapore each down 0.9 per cent, while there werealso sharp falls in Taipei, Jakarta and Manila. However, Japan’s Nikkei recovered from early losses to sit0.1 per cent higher. Adding to downward pressure were worries about centralbank inaction in dealing with a slowdown in the globaleconomy. Yesterday, the European Central Bank opted against freshstimulus, with its president Mario Draghi calling for"patience" to see the effect of vast amounts of cash alreadyinjected into the system. While he had not been expected to announce any action,there was disappointment Draghi did not provide any forwardguidance, while some analysts said the bank was possiblyplanning new measures as its bond-buying programme reachesruns out of assets to buy. Tokyo-based dealers are also concerned at the lack ofmovement from Japan’s central bank ahead of a policy meetinglater this month, despite another weak growth readingyesterday and a general malaise across the economy. "The ECB, and many central banks now, look to be takingmore of a measured approach to additional policy easingcompared with the not-too-distant past," Philip Borkin, asenior economist in Auckland at ANZ Bank New Zealand, said ina client note. "This is only natural, of course, as monetary policydelves further into the unknown." Hong Kong stocks soared one per cent as traders welcomednews that mainland Chinese authorities would allow thecountry’s insurers to invest in the city’s stock market. The gains extended the previous day’s advance fuelled bynews of the first rise in Chinese imports for 22 months. Shanghai was flat despite figures showing the producerprice index – a measure of the cost of goods at the factorygate – fell at its slowest pace in more than four years. (AFP)CPS