Asian stocks slump on profit-taking after US-NKorea tensions

Ivan Schwartz
August 13, 2017

Each fell at least 1.4%.

Ryanair also managed to avoid finishing in the red, closing more or less flat at €18.17.

The Nasdaq Composite was down 37.30 points, or 0.59 per cent, at 6,315.03.

The latest round of tensions began after U.S. President Donald Trump on Tuesday warned North Korea that it would face "fire and fury" if it threatened the United States.

The S&P 500 index was on track for its first daily drop of more than 1 percent in nearly three months on Thursday as investors grew cautious over escalating tensions between the United States and North Korea.

Titled "Reckless game over the Korean Peninsula runs risk of real war", the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the U.S.is the first mover.

North Korea had announced a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers.

Trump tweeted on Wednesday about the strength of the American nuclear arsenal, but expressed hope it would not need to be used, while U.S. Secretary of State Rex Tillerson said he did not believe there was an imminent threat.

"It's incredible when you consider the headlines just how calm the equity markets are, how they've taken things in their stride", said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina. Gold hit a two-month high of US$1,278 an ounce amid the nervousness.

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FTSE ends down as shares hit by US-North Korea tensions
On the currency markets, the pound fell 0.2% against the dollar to $1.2976 and slipped 0.05% against the euro at 1.1055 euros. Housebuilders Persimmon and Barratt Developments were among the biggest gainers of the day, up 1.58% and 1.02% respectively.

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David Luiz's smooth finish set up a tense finale but Chelsea could not find the final goal to salvage a draw and fell to defeat. Robbie Brady then hit the post at the opposite end from a free-kick as Burnley pushed for a fourth.

The indicated US market moves reflect a selloff across global stock markets Friday.

"Today's inflation data put the Fed on pause and really diminishes the fact that there's still some noise going around with the North Korea-U.S. situation", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.

However, bank stocks, including Goldman Sachs, Bank of America and Morgan Stanley, were down about 1 per cent on the dimming prospects of another rate hike this year.

After a dip of as much as 0.52 percent earlier in the day, Wall Street's three major indexes bounced off intraday lows. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 2.215%.

Belgian drugmaker Galapagos was a rare bright spot, finishing up 4.8 per cent as brokers upgraded their view on the stock which also outperformed on Thursday after a successful drug trial.

Falling crude prices made oil & gas stocks a weight too, dropping 1 percent with Tullow Oil the top faller. Brent crude, used to price worldwide oils, declined 23 cents to $51.67 per barrel in London.

The dollar slipped to 109.04 yen from 109.26 late Thursday.

U.K.'s FTSE 100, the German DAX and the French CAC 40 all dropped more than 2.3% this week. South Korea's Kospi lost 1.7 per cent, while Hong Kong's Hang Seng slid 2 per cent. Australia's S&P/ASX 200 dropped 1.2 per cent. Japan was closed on a public holiday.

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