Published: Thu, August 17, 2017
Markets | By Noel Gibbs

Equities fall on rising tension between US & North Korea

Equities fall on rising tension between US & North Korea

On Tuesday, tensions between Pyongyang and Washington saw further cooling as North Korean leader Kim Jong Un announced that he wouldn't launch a ballistic-missile attack on the USA territory Guam, according to the country's state media. It is heading for a 2.5% drop for the week.

The president said "things will happen to them they never thought possible" should Pyongyang attack the USA or its allies.

Data showed US retail sales recorded their biggest increase in seven months in July as consumers boosted purchases of motor vehicles as well as discretionary spending.

"If the USA and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so", the editorial's authors said.

The S&P 500 posted 49 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 98 new highs and 85 new lows.

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Wall Street's so-called "fear gauge", the CBOE Volatility Index, meanwhile, hit the highest levels since Election Day on Friday (http://www.marketwatch.com/story/wall-streets-fear-gauge-on-course-for-biggest-weekly-surge-in-2-years-2017-08-11), after a spike on Thursday. The index closed at 16.04 overnight, the highest level since November 8, when Trump was elected president.

MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.6pc.

The dollar will probably trade mainly in a range of around 109 yen to 111 yen in the near term, Murata said. It was down 0.2% at ¥108.98, after retreating 0.7% on Thursday.

Geopolitical risks can boost demand for assets considered safe-haven investments, such as gold.

The market's backstop safety asset, gold, edged up to its latest two-month high of $1,288 an ounce.

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The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialise.

He said the Nikkei will likely rise above 20,000 on the back of positive catalysts including brisk first-quarter earnings and full-year projections from Japanese companies as well as strong growth domestic product data.

U.S. producer prices Thursday disappointed, as traders await consumer price inflation figures later Friday.

Meanwhile, a lower-than-expected rise in United States consumer prices in July suggesting benign inflation could persuade a cautious Federal Reserve to delay raising interest rates until December. They have soared more than 2% in the previous two sessions, and are set for a weekly gain of 2.25%.

Markets are now awaiting United States consumer price data for July, due later in the session.

Escalated North Korea Tensions and the Global Financial Markets
His remarks prompted joy in Guam , where officials described themselves as "almost ecstatic that Kim Jong-Un has backed off ". Moon said his South Korean government "will put everything on the line to prevent another war in the Korean Peninsula".


The German DAX was moving up 0.3 percent, France's CAC 40 index was rising half a percent and the U.K.'s FTSE 100 was up 0.4 percent. Global benchmark Brent also lost 0.9% to $51.44, after Thursday's 1.5% drop. It is poised to end the week down 1.7 per cent.

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