News Worms
News Worms


Global stocks slide as US-North Korea nuclear tensions rise

Global stocks slide as US-North Korea nuclear tensions rise

The slide deepened after Trump's remarks on North Korea aired. Australia bucked the trend with a 0.4% gain. "Risk aversion is still very much a concern for markets", said Shaun Osborne, chief currency strategist, at Scotiabank in Toronto. Small-company stocks fell more than the rest of the market.

Just hours before North Korea's warning, US President Donald Trump warned Pyongyang that if it continued to threaten Washington, the Communist nation would face "fire and fury" the world has never seen.

The MSCI Asia Pacific Index has rallied 19 per cent so far this year, last week posting its highest close since 2007 amid strong earnings from some of the region's key companies and optimism United States interest rate increases will remain gradual.

South Korean Defense Minister Song Young-moo told a press conference at the time of the vote that Seoul would take "independent measures" to curb the North's nuclear proliferation "as soon as possible".

Investors instead turned to safe-haven assets such as gold, pushing it to a two-month high, and the Japanese yen rose. The Nasdaq composite lost 0.2 percent, to 6,370.46.

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. The yield on the 10-year Treasury note slipped to 2.22 percent from 2.25 percent late Wednesday.

A man looks at a stock quotation board flashing the Nikkei 225 key index of the Tokyo Stock Exchange in front of a securities company in Tokyo. Germany's DAX fell 1.2 percent, while the CAC 40 in France lost 0.7 percent. "I think gold will break $1,300 in this particular rally coming up and I think silver can break $20", he added.

Disney dropped 3.9 percent, its biggest single-day loss in more than a year, after the media giant reported a weak quarter and said it would pull its movies from Netflix and start two of its own video streaming services. The euro fell to $1.1749 from $1.1752.

The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday. US crude CLc1 shed 10 cents to $49.07 a barrel. Brent crude, used to price global oils, slid 80 cents, or 1.5 percent, to $51.90. "U.S. equities managed to cut its losses towards yesterday's close and while the VIX (volatility index) did pop higher, it still remains at an overall low level".

While North Korea is likely to remain in focus, a report on consumer price inflation may also attract attention on Friday, with consumer prices expected to rise by 0.2 percent in July. Gold prices increased 1% and the Swiss franc gained against all major currencies.

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