Global markets jarred by North Korea fears

Cornelia Mascio
Agosto 13, 2017

The stage was set for the USA indexes to go lower early Wednesday as investors around the world reacted to the rising war of words between the US and North Korea, pushing global market indexes lower.

Investors have been jittery about North Korea since Tuesday when Trump said any threats from Pyongyang would be "met with fire and fury like the world has never seen".

Gold prices held steady after touching their highest in over two months on Friday and were on track for a weekly gain, buoyed as rising tensions between the United States and North Korea triggered safe-haven buying. According to the Associated Press, South Korea's Kospi lost 1.7 percent, while Hong Kong's Hang Seng slid 2 percent.

A spokesman for the Korean People's Army said in a statement that it was "carefully examining" plans for a missile attack on the U.S. Pacific territory, which has a large American military base.

Though Hanke said he did not expect a sustained sell-off in riskier Asian assets, he added "safe assets, as a class, are probably underpriced at present". It rose $15.70, or 1.2 percent, to $1,277.80 an ounce.

KEEPING SCORE: The Standard & Poor's 500 index fell 7 points, or 0.3 percent, to 2,466 as of 11:20 a.m. The Russell 2000 index of smaller-company stocks gave up 13.20 points, or 0.9 percent, to 1,396.95.

European markets also slid in early trade after Wall Street indices suffered their biggest losses in almost three months Thursday, while the dollar struggled to recover from eight-week lows below 109 yen as investors fled to safe haven assets. The Japanese yen hit an eight-week high against the USA dollar, and US -traded Nikkei stock futures dropped 2 percent to their lowest since mid May.

The broader Topix shed 0.65 point to 1,617.25, while the JPX-Nikkei Index 400 shed 8.16 points, or 0.1 percent, to end at 14,367.56.

The Korean won fell more than 1 percent at one point and is now down 0.5 percent.

Insurers and banks, which invest in higher-yielding products such as foreign bonds, underperformed after U.S. Treasury yields fell on Wednesday, with the yields on the benchmark 10-year note hitting a six-week low.

Macy's M.N shares closed down 10.2 per cent and Kohl's KSS.N fell nearly 6 per cent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off. Brent crude, used to price worldwide oils, declined 40 cents to $51.50 per barrel in London.

About 7.5 billion shares changed hands on US exchanges, well above the 6.25 billion average for the last 20 days. Australia's S&P/ASX 200 dropped 1.2 percent.

The Japanese yen strengthened by 0.5 percent to around 109.70 per dollar.

The index was also dragged lower after Beijing ordered probes into three major Chinese social networking platforms over outlawed content. The euro rose to $1.1824 from $1.1774.

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