Stocks lower, safe-haven assets higher amid US-North Korea tensions

Pauline Gross
August 11, 2017

'If anything, maybe that statement wasn't tough enough, ' he told reporters yesterday, saying that North Korea 'better get their act together or they're going to be in trouble like few nations ever have been in trouble in this world'.

London's benchmark FTSE 100 index shed 0.9 per cent to 7,323.45 points.

'The enormous surge in the Vix tells us exactly what traders are thinking, ' said David Madden, market analyst at CMC Markets UK.

Shane Oliver, head of investment strategy at AMP Capital in Sydney, said: "What has changed this time is that the scary threats and war of words between the U.S. and North Korea have intensified to the point that markets can't ignore it". Global equity markets have been severely shaken by the standoff between the two countries'.

Many Asian currencies struggled, with the Korean won heading for its sharpest fall in almost eight weeks.

The yen's gains helped push the Nikkei 225 in Tokyo down 1.3% to close at 19,738.1 points while the broader MSCI Asia ex-Japan index was marked 0.57% by 09:00 London time.

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North Korea talk drags global stocks lower; gold, yen rise
The pan-European FTSEurofirst 300 index lost 0.75 per cent and MSCI's gauge of stocks across the globe shed 0.33 per cent. The Swiss franc reversed a two-week losing streak, rising rose 1.12 percent versus the greenback at 0.96 per dollar.

Regional stocks remained lower throughout the session after North Korean leader Kim Jong Un made an explicit threat to strike a USA military base in Guam (http://www.marketwatch.com/story/north-korea-threatens-missile-strike-on-us-base-on-guam-2017-08-08).

The Dow Jones Industrial Average is priced for a 35-point pullback from its Tuesday close of 20,085.34 points while the Nasdaq is set up for a 30-point, or 0.44%, decline at the opening bell.

United Kingdom stocks closed in the red Wednesday, as assets viewed as risky were swept aside amid escalating tensions between the USA and North Korea.

Back on the Stoxx 600, shares of gold miners Fresnillo PLC (FRES.LN) and Polymetal International PLC (POLY.LN) leapt 4.9% and 3.3%. The price of gold rose 1.2 percent and the Swiss franc had its best day in almost three years.

The jitters came as Pyongyang said it was considering plans to attack the US Pacific territory of Guam - while Donald Trump threatened to react with "fire and fury".

Other reports by GizPress

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