CANBERA (dpa-AFX) - Asian stocks fell on Monday and safe-haven assets such as gold and the yen rose after Iran vowed 'severe revenge' against the United States for killing top commander Qasem Soleimani and U.S. President Donald Trump threatened Iraq with harsh sanctions if the country forced out U.S. troops.
Chinese shares gave up early gains to end on a flat note as looming military tensions in the Middle East sent global oil prices skyrocketing.
China's private sector growth eased in December as both manufacturing and services logged weaker growth, survey data from IHS Markit showed. The Caixin composite Purchasing Managers' Index fell to 52.6 from 53.2 in November.
Hong Kong's Hang Seng index ended down 0.79 percent at 28,226.19. Hong Kong's private sector remained deep in contraction in December, although it improved somewhat, the latest survey from HIS Healthcare showed with a PMI score of 42.1, up from 38.5 in November.
Japanese shares led regional losses amid a broad selloff as traders returned to their desks after New Year holidays.
The Nikkei average fell 1.91 percent to 23,204.86, hitting a one-month low on fears of an escalation in U.S-Iran tensions after the U.S. killing of a top Iranian general in a strike in Baghdad last week. The broader Topix index closed 1.39 percent lower at 1,697.49.
Automakers Honda Motor and Toyota Motor lost 2-3 percent as the yen hit a three-month high amid demand for haven assets. Nissan Motor dropped 1.7 percent as former chief Carlos Ghosn fled Japan before his trial on charges of financial misconduct. Petroleum explorer Inpex Corp surged 4.1 percent on higher oil prices.
The manufacturing sector in Japan continued to contract in December, and at a faster rate, the latest survey from Nikkei revealed today with a manufacturing PMI score of 48.4, down from 48.9 in November.
Australian markets recovered from an early slide to finish marginally higher. Banks ANZ, Commonwealth and NAB fell between 0.4 percent and 0.7 percent while mining heavyweight BHP rose 0.6 percent and Fortescue Metals Group added 0.2 percent.
Gold miner Evolution Mining soared 6.8 percent and Newcrest rallied 3.9 percent as gold prices hit near seven-year high amid heightened geopolitical tensions.
Energy stocks such as Woodside Petroleum, Beach Energy, Oil Search and Santos surged 2-3 percent as crude oil prices boiled above the $70 a barrel mark. The upsurge in oil prices played spoilsport for airline stocks, with Qantas Airways losing 2.6 percent and Virgin Australia Holdings tumbling 6.5 percent.
The manufacturing sector in Australia continued to contract in December, albeit at a slower rate, the latest survey from the Australian Industry Group revealed today with a Performance of Manufacturing Index score of 48.3, up from 48.1 in November.
Separately, data from IHS Markit revealed that Australia's private sector contracted for the second straight month in December, reflecting declines in both services and manufacturing output.
Seoul stocks sank on concerns that a rise in global oil prices may further undermine South Korea's export slump. The Kospi average dropped 21.39 points, or 0.98 percent, to 2,155.07.
New Zealand shares fluctuated before finishing modestly higher. The benchmark S&P/NZX 50 index rose by 34.18 points, or 0.29 percent, to 11,627.32.
Singapore's Straits Times index was down 0.8 percent. The private sector in Singapore continued to expand in December, and at a faster rate, the latest survey from HIS Healthcare showed with a PMI score of 51.0., up from 50.4 in November.
U.S. stocks fell on Friday as tensions flared up in the Middle East and data showed that U.S. manufacturing activity unexpectedly contracted at a faster rate in December. Energy stocks surged after West Texas oil at one point rallied almost 5 percent.
The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite dropped around 0.8 percent while the S&P 500 shed 0.7 percent.
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