Published: Sat, August 12, 2017
Markets | By Noel Gibbs

Political tensions continue to weigh on world stocks

Political tensions continue to weigh on world stocks

The Dow Jones Industrial Average fell 0.2%, the S&P 500 ended marginally lower and the Nasdaq Composite ended down 0.3%.

The benchmark Korea Composite Stock Price Index lost 31.90 points, or 1.35 percent, to 2,327.57 in the first 15 minutes of trading.

Markets had seen a tentative recovery in risk appetite in United States and early Asian trading, but as the war of words resumed Asian stocks dropped back and London, Frankfurt and Paris all lost 0.5 to 1.2 per cent.

But while most traders appeared to favour safe-haven assets, bargain seekers helped Wall Street's three major indexes pare the day's earlier losses.

The VSTOXX, the main European gauge of equity investor anxiety, jumped 26 percent to 23.8, a near four-month high, though it remained near historically depressed levels.

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U.S President Donald Trump warned North Korea again on Thursday not to strike Guam or USA allies, saying his earlier threat to unleash "fire and fury" on Pyongyang if Kim Jong-un launched an attack may not have been tough enough.

"While he did not comment on what he meant by that statement, Trump said that North Korea should be "very, very nervous" if it "(did) anything in terms of even thinking about an attack". "If the market really believed that the reaction of north korea was imminent, I think it would drop much more" nuanced Alan Skrainka.

Sterling was sitting at 1.287 against the American currency, while the euro was at 1.17 during Friday trading, as relations between Kim Jong-un's rogue state and the USA president continued to deteriorate. Apple was down 2.3 percent, weighing most on the index.

In Europe, equities dived, with London losing 0.8 per cent, while Frankfurt and Paris shed 1.3 per cent and 1.8 per cent respectively.

But the S&P Bank sub-sector fell 0.7 percent on dimming prospects of another rate hike this year since higher rates tend to boost bank profits. Bucking the trend, shares of Travelers and those of Home Depot rose, recently up 1.1 percent and 1 percent respectively, posting the biggest percentage gains in the Dow. South Korea's Kospi fell 0.5 percent.

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The price of gold rose 1% to $1,274.39 per ounce, with Fresnillo and Randgold Resources up 72p to 1,544p and 200p to 7,380p respectively.

Mr Trump earlier this week said North Korea would be met with "fire and fury" if it continued to threaten the US. Like gold silver has also seen a rise, reaching a high of $17.24, before finishing 1.1% up at $17.08.

Falling crude prices made oil & gas stocks a weight too, dropping 1 percent with Tullow Oil the biggest faller. They plunged 2 percent on Thursday on fears of slowing demand and lingering concerns over a global oversupply.

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favored decliners.

The Japanese yen strengthened by 0.5 percent to around 109.70 per dollar. Britain's FTSE 100 sank 1.4 percent.

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