Most Asian Markets Sag in Wake of Malaysia Airlines MH17 Missile Attack

Most Asian markets traded lower on 18 June as the crash of a Malaysia Airlines passenger aircraft in the Ukraine weighed down on risk appetite.

The incident has sharply amplified geopolitical risks – market sentiment took a beating earlier on news that Israel had launched a ground offensive in the Gaza strip.

The FTSE Bursa Malaysia KLCI was trading 0.40%, or 7.46 points, lower to 1875.68.

The DJ Malaysia TSM was trading 0.55%, or 19.68 points, lower to 3567.02.

The Shanghai Composite was trading 0.09%, or 1.75 points, higher to 2,057.34.

Hong Kong's Hang Seng was trading 0.42%, or 99.90 points, lower to 23,420.97

India's S&P BSE Sensex was trading 0.11%, or 28.68 points, higher to 25,589.84.

The Japanese Nikkei finished 1.01%, or 154.55 points, lower at 15,215.71.

Australia's S&P/ASX finished 0.17%, or 9.20 points, higher at 5,531.60.

South Korea's Kospi finished 0.07%, or 1.48 points, lower at 2,019.42.

Market participants in Asia shed their bullish positions Friday morning, after waking up to news that a Malaysia Airlines Boeing 777 jet was shot down in the eastern Ukrainian region of Donetsk.

The US believes a surface-to-air missile brought down the passenger plane flying from Amsterdam to the Malaysian capital of Kuala Lumpur, killing all 298 passengers aboard.

Both Russia and Ukraine have denied involvement in the crash, which came a day after Washington stepped-up sanctions against Moscow.

Chris Weston, chief market strategist at IG, said in a note to clients: "Unless we hear more definitive news, the uncertainty could see elevated risk aversion."

Company Stock Movements

In Kuala Lumpur, Malaysia Airlines' stock was the obvious victim. The company's stock plunged some 18% on 18 July given that it has suffered two major aircraft disasters in about four months. Passengers have kept away from the company following the unexplained disappearance of flight MH370 earlier in the year.

In Tokyo, consumer electronics majors Olympus and Sharp shed 2% each.

In Shanghai, property stocks rallied on hopes that Chinese lawmakers will ease restrictions on the sector – June's data showed that home prices in China rose at their slowest annual pace so far this year.

Poly Real Estate shot up 6% while China Merchants Property gained over 4%. Vanke added 3.5%.

In Seoul, LG Electronics was down about 2%

In Sydney, gold miners Endeavor Mining and Newcrest Mining added 5% and 3% respectively.

US Markets

US stocks tanked on 17 June, pulled down by geopolitical concerns.

Market players sold shares following news of Malaysia Airlines' Ukraine disaster and on news of Israeli moves in Gaza.

The Dow finished 161.39 points, or 0.9%, lower at 16,976.81.

The S&P 500 closed 23.45 points, or 1.2%, lower at 1,958.12.

The Nasdaq ended 62.52 points, or 1.4%, lower to 4,363.45.

Scott Schuberg, CEO, Rivkin Securities said in a note to clients: "The tragic shooting down of MH17 over Ukraine cast a shadow over markets last night. I'm sure there will be a lot of heavy hearts [on 18 July] as Australians wake up to the chilling news that 27 of their own and 268 others have lost their lives to an event that nobody yet quite understands.

"...There is no doubt there will be some who will see the Malaysian Airlines issue as potential threat to peace between Russia and Ukraine."