Asian markets down on Iraq fears

Hong Kong - Asian stocks were mixed on Friday, after US President Barack Obama said he had authorised air strikes against Sunni extremist militants in Iraq as concerns grew about the security situation there.

Tokyo stocks dropped to a two-month low, falling 2.98% to close at 14 778.37. Sydney was down 1.34% to close at 5 435.3, while Seoul lost 1.14% to end at 2 031.10.

Hong Kong fluctuated through afternoon trade before closing down 0.23% to 24 331.41.

However, stocks in mainland China bucked the downward regional trend after the world's second-largest economy saw export growth accelerate.

Shanghai closed up 0.31% at 2 194.43, and Shenzhen gained 0.68% to 1 174.41.

"The market is very thin and highly reactive to overseas inputs," Yutaka Miura, senior technical analyst at Mizuho Securities, told Dow Jones Newswires.

China's monthly trade surplus jumped to a record $47.3bn in July. Exports increased 14.5% year-on-year to $212.9bn, the General Administration of Customs announced, while imports decreased 1.6% to $165.6bn.

In Malaysia, the majority shareholder of ailing Malaysia Airlines said the firm is to be de-listed and taken private ahead of a major restructure following the twin disasters of flights MH370 and MH17.

State investment fund Khazanah Nasional, which owns 70% of the carrier, said it would purchase all minority shares in the firm.

In the US, The Dow Jones Industrial Average dropped 75.07 points to 16 368.27.

The broad-based S&P 500 fell 10.67 to 1 909.57, while the tech-rich Nasdaq Composite Index lost 20.08 at 4 334.97.

Brent Schutte, market strategist at BMO Global Asset Management, said Thursday's losses on Wall Street were "completely" due to a sharp worsening of conditions in Iraq.

In Tokyo, the Nikkei's tumble below the psychologically important 15 000 level came as the yen - shot up in forex markets.

The dollar dropped to as low as ¥101.58 before recovering to ¥101.81, but it was still well down from ¥102.09 in New York late on Thursday.

The euro was also lower against the Japanese currency at ¥136.04 from ¥136.42, while it bought $1.3360 against $1.3363.

Investors tend to buy the yen in times of uncertainty and turmoil because it is regarded as a currency safe haven.

In oil trade, the US benchmark West Texas Intermediate for September delivery rose 71 cents to $98.05 while Brent for September gained 96c to $106.40 in afternoon trade.

Gold fetched $1 316.64 an ounce by 11:00 compared with $1 305.20 late on Thursday.

In other markets:

- Manila fell 1.08% to 6 880.34.

Philippine Long Distance Telephone dropped 0.46% to 3 000.00 pesos, while Ayala Land retreated 2.23% to 30.70 pesos.

- Taipei fell 0.5% to 9 085.96.

TSMC fell 0.82% to Tw$120.5, while Acer rose 1.66% to Tw$24.45.

- Wellington fell 0.83% to 5 055.20.

Telecom Corp was off 1.74% at NZ$2.82 and Fletcher Building slipped 2.12% to NZ$8.76.