Monday, 21 August, 2017

Stock markets slip as North Korea tensions build

A woman walks past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo on Aug. 9 2017 A woman walks past an electronic stock board showing Japan's Nikkei 225 index at a securities firm in Tokyo on Aug. 9 2017
Nellie Chapman | 12 August, 2017, 21:45

Stocks are lower at midday as investors weighed the growing tensions between the USA and North Korea.

The Nasdaq gave up 13.31 (-0.21 percent) to close at 6,370.46, while the S&P 500 finished at 2,474.92, down 5.99 (-0.24 percent) from its open.

North Korea said it was considering plans to fire missiles at Guam, a USA -held Pacific island, after President Trump's warning on Tuesday. It's also called the "fear index".

"What has changed this time is that the scary threats and war of words between the U.S. and North Korea have intensified to the point that markets can't ignore it", said Shane Oliver, head of investment strategy at AMP Capital in Sydney, as quoted by Reuters.

The decline was broad, with all the 11 major S&P indexes lower.

Falling crude prices made oil & gas stocks .SXEP a weight too, dropping 1 percent with Tullow Oil the biggest faller.

Bond prices were little changed.

In Europe, Britain's FTSE 100 was down 1.1 percent to 7,306, while France's CAC 40 fell 1.1 percent to 5,058. "This is not the first time the markets are playing the off-again, on-again scenario", said analyst Naeem Aslam at Think Markets, that's why the uncertainty in equities has eased down faster, especially if compared to yesterday's sell off.

And in a textbook-type cross-asset move toward safety in times of trouble, the Japanese yen hit an eight-week high against the USA dollar while spot gold also reached a two-month high.

The U.S. Treasury market rallied, with the benchmark 10-year yield shedding 3 bps to 2.21%.

"Trump's response was aggressive and that's why the (stock) market turned lower", said Ken Polcari, director of the NYSE floor division at O'Neil Securities.

LOOKING GOOD: Michael Kors climbed 21.9% to $45.40 after the luxury handbag and apparel designer and retailer posted quarterly results that beat analysts' forecasts as sales improved.

Japan's Topix index had the biggest slide in nearly three months, falling 1.3 per cent on trading volume 22 per cent higher than the 30-day average at the close.

The dollar index fell 0.32 percent, with the euro up 0.42 percent to $1.1819.

Nevsun Resources Ltd offset some of the material group's gains, plunging 16.4 percent to C$2.75 after the company reported disappointing quarterly results.

Elsewhere in commodities, the September crude contract advanced 20 cents to $49.76 per barrel and the September natural gas contract was up seven cents to $2.95 per mmBTU.

The Nasdaq Composite, meanwhile, was facing its worst week since the one ended December 2, which logged a loss of just over 2%.

Wilmar International slipped 6.4 per cent or 22 cents to $3.20; Hongkong Land lost 2.1 per cent or 16 U.S. cents to US$7.34. Crude briefly pared losses in late trading after USA inventories fell more than expected last week.