Markets extend losses as Korea tensions escalate

Share

World stocks fell for a third day yesterday and investors moved back into the Swiss franc, yen and gold as North Korea ratcheted up tensions with the United States with a threat to land a missile just short of the USA territory of Guam.

North Korea went further with its threat to the US by providing detailed plans about how it plans to launch missile strikes on the US-Pacific territory of Guam.

Globally, France's CAC 40 share index fell 1.5 percent by the afternoon; Germany's DAX fell 1.3 percent.

The euro fell a quarter-of-a-percent against the dollar to trade at $1.1728 as European markets opened.

21st Century Fox will report earnings after the market close in the U.S.

Stocks finished off their lows, but still held on to losses Wednesday (http://www.marketwatch.com/story/us-stock-futures-pull-back-as-north-korea-threatens-guam-2017-08-09), as investors remained anxious about the U.S.

-North Korea tensions and the weak data that further reduced expectations of a Fed rate hike in December. Despite the recent depreciation, the Kiwi Dollar is ahead by more than 5% since the beginning of the year, and moving off a multi-year high at $0.7557.

Mr Trump warned Kim Jong Un earlier this week that his country faced "fire and fury".

South Korea's KOSPI fell 1.8 per cent to an 11-1/2-week low, but its losses for the week are a relatively modest 3.2 per cent.

Now installed in the White House, Trump issued a new warning to Pyongyang on Friday, tweeting: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely". It is now on track for its biggest weekly drop since the week before the November 8 US presidential election.

On Thursday, New York Federal Reserve President William Dudley said he expects sluggish US inflation to rise over the next several months while the hot labor market gets even hotter. The index closed at 16.04 overnight, the highest level since November 8, when Trump was elected president.

More news: Wall St stock rally could be derailed by US-N Korea tension
More news: Asia Pacific Market: Korean tensions likely continue selloff
More news: We're buying three more players - Guardiola

The Dow Jones Industrial Average was down 82.37 points, or 0.37 percent, to 22,002.97, the S&P 500 had lost 8.34 points, or 0.34 percent, to 2,466.58 and the Nasdaq Composite had dropped 38.99 points, or 0.61 percent, to 6,331.47.

USA stock futures were marginally softer on Friday.

USA equities steepened their losses late in the session after President Donald Trump said his earlier warnings to North Korea may not have been tough enough. The FTSE 100 index of leading British shares declined 0.6 percent.

The yen is often sought in times of geopolitical tension, partly because Japan has a big current account surplus.

"Also people may be on vacation and might not be watching the market as closely".

The Standard & Poor's 500 index fell 10 points, or 0.4 percent, to 2,463.

News that US producer prices unexpectedly fell in July earlier helped send the dollar lower. The Swiss franc was on pace for its biggest single-day rise against the euro since the Swiss National Bank removed its cap on the currency in January 2015.

Gold rose 0.6 per cent to $1,268 an ounce.

"Japanese equities hadn't been rising much despite positive earnings results, so investors had started jumping at shadows, doubting whether they should really be holdings onto Japanese stocks".

The Swiss franc, a barometer of risk sentiment, surged 0.6 percent to 0.9688 francs against the US dollar, reversing a two-week losing streak. It slid 80 cents, or 1.5 percent, to close at $51.90 per barrel on Thursday.

Share