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June 26, 2017

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Asian shares slump after Wall Street decline

HONG KONG -- World stock markets slumped Wednesday after Wall Street's biggest decline in two weeks and ongoing violence in Iraq dampened sentiment.

Asian and European investors took their lead from Wall Street, where U.S. blue-chip bank and energy stocks led a sell-off in the final hour of the trading session. A report that new U.S. home sales rose in May to the highest in six years helped homebuilders, but wasn't enough to lift the broader market.

Investors were also prompted to cash in their gains after fresh reports of violence in Iraq, including unconfirmed airstrikes by Syrian warplanes, that raised fears that the conflict could spiral into a broader regional conflict.

"Fresh geopolitical concerns in Iraq may have given investors the perfect excuse to take profits off the table," said Desmond Chua, market analyst at CMC Markets in Singapore.

In early European trading, France's CAC 40 slipped 0.6 percent to 4,490.13 while Germany's DAX dropped 0.6 percent to 9,883.62. The FTSE 100 index of leading British companies lost 0.6 percent to0 6,747.40.

Asian stock markets slipped Wednesday following the previous day's gains, with investors taking their lead from losses on Wall Street as the dollar edged down against the yen.

U.S. oil prices moved higher following a report that Washington had decided to start exporting crude for the first time in four decades.

Tokyo slipped 0.71 percent, or 109.63 points, to 15,266.61, Sydney eased 0.57 percent, or 30.78 points, to 5,402.0 and Seoul gave up 0.63 percent, or 12.58 points, to close at 1,981.77.

Shanghai retreated 0.41 percent, or 8.43 points, to 2,025.50 and Hong Kong was a touch lower, dipping 13.94 points to 22,866.70

With few catalysts to drive trade, investors took the opportunity to cash in gains fuelled earlier this week by data indicating China's manufacturing sector is creaking back into gear after contracting for six months.

The main lead came from New York, where all three of the city's main indexes slipped Tuesday despite another strong set of indicators.

The U.S. Conference Board said consumer confidence rose for the second straight month in June to its highest level since January 2008, when the economy was sinking into recession.

It also found consumers were more positive about the jobs outlook and had greater expectations overall for the next six months.

Separately, the Commerce Department said sales of new homes in May hit their highest pace since 2008. Sales surged 18.6 percent month-on-month to 504,000 units as the country moved out of the winter lull. Sales were also nearly 17 percent higher year-on-year.

However, the Dow sank 0.70 percent and the S&P 500 fell 0.64 percent after ending last week at record highs, while the Nasdaq slipped 0.42 percent

The selling in equities seeped into currency markets, where the dollar dipped against the yen.

The greenback was at 101.90 yen in afternoon trade, compared with 101.98 yen in New York Tuesday. The euro bought US$1.3611 and 138.72 yen against US$1.3606 and 138.75 yen.

On oil markets, U.S. crude prices — already at nine-month highs — edged up owing to the ongoing crisis in Iraq, where insurgents have captured swathes of territory in a lightning offensive that began on June 9.

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