Markets extend losses as Korea tensions escalate

Ivan Schwartz
August 12, 2017

The sabre-rattling - sparked when President Donald Trump stunned the world with an apocalyptic warning to unleash "fire and fury" on North Korea - continued Thursday as Pyongyang mocked the U.S. leader as "bereft of reason".

The broad-based Stoxx Europe 600 stock index dropped 0.5 percent in early trading, with key indices, such as Britain's FTSE 100, Germany's DAX and France's CAC all down 0.5 percent or more.

There had earlier been falls of almost 2% on South Korea's Kospi and Hong Kong's Hang Seng, with markets in mainland China and Australia also down.

"Risk assets remain out of favour, as the threat of a conflict with North Korea pushes traders towards havens", said Joshua Mahony, market analyst at IG.

The iShares MSCI South Korea Capped exchange traded fund EWY.P fell in a volume spike and ended down 0.85 percent.

Macy's (M.N) shares closed down 10.2 percent and Kohl's (KSS.N) fell nearly 6 percent 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.

Franco Nevada Corp rose 3.9 percent to C$95.65, while Barrick Gold Corp was up 1.9 percent at C$21.26.

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".

Carragher: 'Conte to quit Chelsea after Matic joined Man United'
Former Liverpool defender turned football pundit Jamie Carragher has said that he doubts that Antonio Conte will still be Chelsea manager this time next year.

European Union extends pressure on North Korea
The EU move means that 62 people and 50 entities, like companies, organizations or banks, are now under sanctions in line with the United Nations list.

Federer eases into Rogers Cup semis
Haase will face the victor between second-seeded Roger Federer and Roberto Bautista Agut in the semifinals on Saturday. The 36-year-old Swiss won 6-4 6-4 in 68 minutes to set up a meeting with unseeded Dutchman Robin Haase.

Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the US Pacific territory of Guam.

"Of course it's all come at a time when share markets are due for a correction, so North Korea has provided a ideal trigger", he added. Nvidia's shares shed more than 5% after the chip maker's revenue rose only 2% from the first quarter.

With most companies having reported second-quarter earnings, a divergence was increasingly visible between euro zone corporates, whose earnings are dented by a stronger euro, and the broader pan-European index. Should they start re-allocating, we believe a big move in global gold prices will inevitably ensue.

Shares of Macy's tumbled 9.5 percent and Kohl's 6.7 percent after the department store operators reported a drop in quarterly same-store sales that stoked concerns that their turnaround may still be a long way off. It usually moves opposite to stocks' movements and rises when the S&P 500 falls.

Elsewhere in commodities, the September crude contract advanced 20 cents to $49.76 per barrel and the September natural gas contract was up seven cents to $2.95 per mmBTU. Simon Property Group fell 2.1% to $162.86.

The Japanese yen last strengthened 0.03 percent versus the greenback at 109.22 per dollar.

Benchmark US 10-year notes last rose 6/32 in price to yield 2.1905 per cent, from 2.211 per cent late on Thursday.

Other reports by GizPress

Discuss This Article

FOLLOW OUR NEWSPAPER