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Asia300

Singapore stocks post worst fall of year as North Korea worries resurface

Yangzijiang Shipbuilding, ComfortDelGro slump amid flare-up in regional tensions

SINGAPORE (Nikkei Markets) -- Singapore shares suffered their worst fall this year on Monday after North Korea said it tested a hydrogen bomb, reigniting concerns about a flare-up in geopolitical tensions in the region.

The Nikkei Asia300 Index of companies outside Japan declined 0.6% as the already high tensions surrounding the Korean peninsula exacerbated following North Korea's announcement over the weekend that it tested the bomb. Pyongyang had last week fired a missile over Japan and earlier in August threatened to strike America's military base in the Western Pacific.

In response, U.S. President Donald Trump said that North Korea's "words and actions continue to be very hostile and dangerous," and that in addition to other options, the U.S. is considering stopping trade with any country doing business with North Korea.

"There is a strong focus on China's trade relations with North Korea and whether there could be sanctions placed on China or any of North Korea's key trade partners," said Chris Weston, chief market strategist at IG.

The fresh bout of geopolitical concerns pushed to the background the U.S. non-farm pay rolls data released on Friday. The U.S. economy added 156,000 jobs last month, lower than what economists were expecting, the data showed.

Singapore's FTSE Straits Times Index dropped 1.4% to 3,230.97, a seven-week low. Only one of the 30 stocks in the benchmark gauge closed higher.

Yangzijiang Shipbuilding Holdings dropped 6.7% to S$1.395, extending losses from Friday after saying it will place 137 million shares at S$1.53 per share as against Thursday's close of S$1.625.

ComfortDelGro Corp. dropped 2.2%. The stock has witnessed selling pressure in recent sessions following last month's gains triggered by the company's talks with Uber Technologies for a potential alliance.

Among other major losers, Golden Agri-Resources dropped 3.8% and Wilmar International declined 2.1%.

In addition to a host of economic data releases, the focus of global markets this week will be on the European Central Bank's policy meeting on Thursday. Investors are waiting see whether the central bank sets a time table for scaling back its bond purchases and whether it raises concerns over the recent strength in the euro.

Malaysian markets were closed for a third straight session on Monday after the government declared Sept. 4 a public holiday to celebrate the country's success in the recently concluded Southeast Asian games, held in Kuala Lumpur. The nation had celebrated Merdeka, or Independence Day, on Aug. 31 and Hari Raya Haji, a Muslim festival, on Sept 1.

--Nimesh Vora and Kevin Lim

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