FTSE ends down as shares hit by US-North Korea tensions

Andrew Cummings
August 12, 2017

European stock markets slid again on Thursday as investors sought safe havens amid tensions between the United States and North Korea, despite an easing in rhetoric. 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. The Dow Jones Industrial Average was trading up 0.2% at 21,894, while the S&P 500 index was up by 0.2% at 2,442, and the Nasdaq Composite Index climbed 0.3% at 6,236.

Materials, home to gold producers and other resource-based companies, was the only gainer among the index's 10 main sectors and was up 0.6 percent.

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".

Most of the reaction is to President Trump's warning on late Wednesday and North Korea's comment about exploring the idea of hitting USA territory Guam with a missile strike.

The overall financials group, which accounts for roughly a third of the index, declined 1.4 percent, while energy shares also fell 1.4 percent as oil prices turned down. He said that North Korea "can be very very nervous" if it acts on either the U.S. or its allies, and warned that "things will happen to them like they never thought possible". Thus, investors were switching from stocks to safe-haven options. Macy's sank 10.3 percent and Kohl's lost 5.8 percent.


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

Gold held steady at two-month high with spot gold rising 0.1 percent to $1,287.83 per ounce, putting the precious metal on pace for its biggest weekly gains since April.

Investors also drew some encouragement from new government data showing US inflation at the consumer level inched higher last month.

Watch maker Fossil Group plunged 25 percent after reporting a weak quarter.

The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday.


The data comes amid tepid inflation that has remained below the Federal Reserve's 2 percent target, despite low unemployment.

USA 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.

The FTSE 100 has fallen by more than 100 points in today's trading so far, as investors continue to act on North Korea-related jitters. Heating oil fell 1 cent to $1.63 a gallon.

Germany's DAX was flat, while France's CAC 40 fell 1.1 percent. "I think before the end of the year the market goes to new highs and (Treasury) yields go higher".


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