Investing.com - Asian equities fell in morning trade on Wednesday as North Korea scrapped talks with Seoul that was planned for later in the day.
North Korea told South Korean authorities that it was “indefinitely” suspending minister-level talks planned for Wednesday, South Korea’s Unification Ministry said, reportedly cited the annual South Korean-U.S. “Max Thunder” air defense drills as the major reason it called off the meeting. The development also casted doubts on a historic summit between U.S. President Donald Trump and his North Korean counterpart leader Kim Jong Un originally planned next month.
"This will weigh on the Korean reconstruction beneficiaries that have had a strong run on peace and even reunification hopes recently," JPMorgan analysts said in a note. "The broader risk for the region if talks do break down is that Trump no longer feels the need to keep China on side and could escalate trade tensions again."
Asian markets traded lower following the news, with the Shanghai Composite and Shenzhen Component opened 0.5% and 0.3% lower respectively, while Hong Kong’s Hang Seng Index slid 1.1%. China’s April home price data is due later in the day.
A rise in treasury yields amid strong U.S. retail and factory data was also cited as headwind for local equities, as U.S. 10-year yield hit 3.095 on Tuesday, its highest since July 2011. The upbeat retail sales data also raised speculations that the Fed may raise rates three more times this year.
Japan’s Nikkei 225 slipped 0.5% after data on Wednesday showed the country’s economy shrank by 0.6% on an annualized basis, compared to the estimate for an annualized 0.2%.
Meanwhile, South Korea’s KOSPI edged up 0.1% in morning trade, despite talks between North and South Korea being abruptly canceled.
Down under, Australia’s S&P/ASX 200 was down 0.5%.