Economy

Equities fall on rising tension between US & North Korea

Equities fall on rising tension between US & North Korea

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 USA leader as "bereft of reason".

The Dow industrials and S&P 500 rose 0.2% in recent trading, though the S&P 500 is set to end the week down 1.4%, its biggest loss since March.

In bond markets, the yield on US Treasuries fell, also pressured by the lowered expectations for a Fed move.

Market analysts expect that the pullback in stocks due to the increasingly aggressive tone in exchanges between Washington and Pyongyang will continue, although investors hope that the selling will not escalate to a correction - a decline of 10 percent or more. The UK's FTSE 100 Index slid 0.6 percent, while Germany's DAX Index retreated 1.1 percent and France's CAC 40 Index gave up 1.4 percent.

A Labour Department report showed its producer price index posted a surprise drop in July, down 0.1 percent for the largest slide in nearly a year.

The pan-European FTSEurofirst 300 index lost 1.01 percent and MSCI's gauge of stocks across the globe shed 0.26 percent for a weekly loss of 1.6 percent, the largest since the week to November 4.

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.

Trump suggested in remarks on Thursday that his comments threatening North Korea with "fire and fury" may not have been tough enough. It's also called the "fear index". Its weekly gain of 2.6 percent is the largest since June 2016.

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This week, the S&P 500 started on a stronger note by rising to new record high price levels.

Nevsun Resources Ltd offset some of the material group's gains, plunging 18.4 percent to C$2.685 after the company reported disappointing quarterly results.

More than 430 stocks from all US exchanges hit their lowest levels in 52 weeks or more on Thursday, the most for any session since mid-November right after Trump was elected.

Michael Kors climbed 21.5 percent after the luxury handbag and apparel designer and retailer's latest quarterly results beat analysts' forecasts as sales improved.

On the London stock market, mining shares saw the biggest falls as many metal prices were hit by the geopolitical concerns.

US crude oil futures settled almost 2 percent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers.

Emerging market stocks rose 0.29 percent. On the Nasdaq, 2,082 issues fell and 669 advanced. The September copper contract was down two cents to $2.91 a pound.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories, leaving prices volatile.


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