Monday Morning Briefing: Asian Shares Fall, Yen Gains On North Korean Missile Concerns

Asian shares declined along with U.S. stock futures, while the yen strengthened as North Korea fired four ballistic missiles.

The Bloomberg Dollar Spot Index was little changed, after it slipped 0.7 percent on Friday to halt a five-day rally. Gold advanced while oil retreated.

North Korea Fires Missiles

Geopolitical tensions rose after Japanese government said North Korea fired four ballistic missiles, three of which fell into waters near Japan.

South Korea's Yonhap News said the North Korea may have launched an intercontinental ballistic missile, though there was no official confirmation of that. North Korea's Kim Jong Un has vowed to build missiles that can reach the U.S.

Prime Minister Shinzo Abe told reporters in Tokyo that Japan had lodged a firm protest with North Korea.

Also Read: North Korea Fires Multiple Missiles Which Fall Into Japan's EEZ

China's 2017 Growth Target

Over the weekend, Chinese Premier Li Keqiang set a 2017 growth target of “around 6.5 percent, or higher if possible” in a report to the annual National People's Congress gathering in Beijing that reiterated the pursuit of neutral monetary policy this year.

Economists surveyed by Bloomberg project 6.5 percent expansion this year.

Also Read: China Targets Growth of About 6.5% Amid Drive to Reduce Risk

Aggressive Rate Path

Investor sentiment turned sour after Federal Reserve Chair Janet Yellen hinted at more aggressive rate hike path after leaving little doubt that the central bank will raise interest rates this month.

The odds for a rate hike at the March 14-15 meeting rose to 94 percent, according to futures rates tracked by Bloomberg.

On Friday, the Dow Jones Industrial Average rose 0.01 percent to end at 21,005.71 while the S&P 500 Index gained 0.05 percent to close at 2,383.12. Interest rate-sensitive sectors such as real estate and utilities were among the losers while bank shares rose.

Also Read: How the Rest of the World Paved the Way for a March Fed Hike

Oil Swings

Oil traded above $53 a barrel after Libya halted exports from two of its biggest oil ports and reduced production from some fields after clashes.

Brent crude for May settlement dropped 17 cents to $55.73 per barrel on the London-based ICE Futures Europe exchange while West Texas Intermediate for April delivery declined 20 cents at $53.13 a barrel on the New York Mercantile Exchange.

Gold remained steady as investors weighed the possibility of a Fed rate hike next week against the tensions sparked by North Korea's latest missile launch.

Also Read: Libya's Biggest Oil Port Shut, Crude Output Cut on Clashes

Quiet Start?

The SGX Nifty Index rose 0.12 percent to 8,932 as of 7:00 a.m., indicating a quiet start to the Indian markets.

Indian shares ended little changed on Friday, as investors weighed the possibility of a Fed rate hike later this month and the outcome of elections in five states due on March 11.

Shares of Bharti Airtel Ltd. and Kalpataru Power Transmission Ltd. will be in focus today.

Bharti Airtel signed an agreement with Luxembourg-based Millicom International to combine operations in Ghana while ICICI Prudential sold 2 percent stake in Kalpataru Power Transmission at Rs 191.7 per share.