2014.08.0808:52:38UTC+00Asian stocks fall on Obama authorizing Iraq airstrike

Asian stocks fall to its lowest as the regional benchmark index stoops to its lowest in seven weeks on the announcement of US President Barack Obama authorizing the air strikes in Iraq.

The MSCI Asia Pacific index shed 1.4% to 1447.07, 4:13 pm, Hong Kong time. The gauge is already approaching a 2.5% loss for the week with levels that was last seen on June 18 of this year.

Hong Kong’s Hang Sang Seng Index, Japan’s Nikkei 225 Index and South Korea’s KOSPI Index lost 0.23% or 56.15 pips to 24,331.41, 2.98% or 454.00 pips to 14,778.37, and 1.14% or 23.41 pips to 2031.10 respectively. Australia’s ASX 200 and the CNBC 100 Asia Idx are down by 1.34% or 73.70 pips to 5,435.31 and 1.43% or 105.68 pips to 7,296.68. China’s Shanghai Composite Index is the only winner among the markets as it gained 0.31% or 6.76 pips to 2194.43.

Tokyo’s Nikon Corp. plunged by 9.4% following a lower revenue forecast. Hong Kong’s Melco Crown Entertainment in Macau shed 3.9% after a worse-than-expected corporate earnings report.

Strategist at CMC Markets, Desmond Chua, told Bloomberg that the US air strikes in Iraq might provoke further tensions in the region with the geopolitical situation escalating everyday. Chua adds that given the high-risk geopolitical events, investors are advised to standby at the sidelines.

US President Barack Obama has given the go signal for a US airstrike on Iraq with the purpose of avoiding genocide while no ground troops will be sent in. The announcement has definitely escalated tensions further with Russia as it retaliated versus the US and European sanctions with the ban on import foods from the western countries. Russian President Vladimir Putin is in the position to raise the turmoil right now if Russia decides to invade Ukraine.