Korean Shares Slide as Tensions Rise

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Shares in South Korea dropped after the North issued a strongly worded warning, and China's markets declined over concerns of further tightening.

South Korea's Kospi ended down 1.3%, at 1901.80, Japan's Nikkei Stock Average of 225 companies dropped 0.4%, to 10039.56, Hong Kong's Hang Seng Index fell 0.8%, to 22877.25, and China's Shanghai Composite declined 0.9%, to 2871.70. Australia's S&P/ASX 200 edged up 0.1%, to 4598.34.

Trading was muted in Asia Friday, with U.S. markets closed Thursday for the Thanksgiving holiday. Economists said investors also paused ahead of economic data due out next week, including October industrial figures for Japan on Tuesday and a set of purchasing-managers indexes for China on Wednesday.

"The bearish trend could continue through early next week," said Hyundai Securities analyst Bae Sung-young.

In Seoul, technology shares declined, in line with the overall index. Samsung Electronics fell 1% and Hynix Semiconductor lost 2.2%. Auto makers and banks were weaker, with Hyundai Motor off 1.4% and KB Financial Group down 0.8%.

In Tokyo, the tensions in Korea also weighed on shares, offsetting the yen's weakening against the U.S. dollar, normally favorable to exporters' shares.

"It's hard for shares to test higher ground amid such geopolitical risk," said Investrust CEO Hiroyuki Fukunaga.

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