Asia stocks lower as UN condemns North Korea test

HONG KONG: Asian stocks foundered Tuesday as the United Nations condemned North Korea's nuclear test and investors awaited more clues about the health of the world economy.

Major markets like Japan and South Korea drifted lower, while the dollar fell against the yen and oil prices slackened.

Tensions on the Korean Peninsula showed no signs of easing after the U.N. Security Council criticized North Korea's test of a nuclear bomb as a "clear violation" of international bans. But the country's defiance continued with reports saying it would likely step up its weapons testing by firing short-range missiles this week.

While hurting sentiment in the short term, the standoff was more an excuse to take a breather from the recent rally, analyst said.

Caution ahead of upcoming economic reports in the U.S., as well as Wall Street and British market holidays Monday, also left investors with few reasons to set a course one way or the other.

"We seem to be stuck at the current levels," said Winson Fong, managing director at SG Asset Management in Hong Kong, which oversees about $2 billion in equities in Asia. "The market has rebounded so much we're going to need major good news to go higher or major bad news to persuade people to take some profits."

Japan's Nikkei 225 stock average fell 55.96 points, or 0.6 percent, to 9,291.04, while Hong Kong's Hang Seng rose 19.91 points, or 0.1 percent, to 17,141.73 in an erratic session.

In South Korea, the Kospi was off 1.4 percent at 1,381.10. The benchmark dived over 6 percent Monday on news of North Korea's nuclear test before recovering nearly all its losses.

Elsewhere, Shanghai's index lost 0.1 percent, Australia's benchmark was up 0.8 percent and Taiwan's market dropped 0.5 percent.

Both U.S. and British financial markets were closed Monday for holidays. European markets finished little changed on Monday.

With investors eyeing key U.S. economic reports this week, including home sales, big-ticket manufactured goods and consumer confidence, Wall Street futures pointed to a slightly lower open on Tuesday. Dow futures were down 11, or 0.1 percent, at 8,249 and S&P futures fell 0.4, or 0.1 percent, to 884.50.

Oil prices fell Asia trade ahead of OPEC's meeting this week, with benchmark crude for July delivery trading at $60.93 a barrel, down 74 cents from overnight trade.

The dollar slipped to 94.66 yen from 94.84 yen, while the euro was lower at $1.3976 compared to $1.4003.