Markets

As North Korean tensions simmer, here's how stocks reacted to past crises

As North Korean tensions simmer, here's how stocks reacted to past crises

When Iraq invaded Kuwait 27 years ago this month, the S&P 500 fell 1.1 percent, and was down 9.3 percent 20 days later.

"For quite some time the market hasn't really reacted to things on the Korean peninsula because we know from the past it is largely North Korean sabre-rattling, and it may yet be".

Rising geopolitical tensions between USA and North Korea continued to keep gold and silver in green on account of increasing safe-haven demand.

U.S. President Donald Trump earlier said he would respond with "fire and fury like the world has never seen".

Stocks going ex-dividend included BT, Royal Dutch Shell, BP, Lloyds, and pharma companies GSK and AstraZeneca, taking around 41 points off the index.

On Wednesday, the Dow closed down 0.2% at 22,048.70, the S&P 500 closed less than 0.1% lower at 2,474.02, and the Nasdaq Composite Index dropped 0.3% to 6,352.33.

North Korea's rapidly advancing nuclear and missile programs could spark an arms race in Northeast Asia and have a nuclear domino effect on South Korea and Japan.

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Investors had sold riskier assets after strongly worded exchanges between Washington and North Korea late on Tuesday. A wave of consolidation is expected in the telecom industry as cable companies seek additional ways to cut costs and grow with more US consumers cutting their cords. The Swiss franc gave up some gains (http://www.marketwatch.com/story/swiss-franc-gives-up-some-gains-as-investors-monitor-us-north-korea-standoff-2017-08-10), as the USA dollar was slightly higher across the board.

So far it's just been a war of words between the US and North Korea so the rally has just been a normal reaction to the possibility of a geopolitical event.

The latest US CPI data will also be an important market focus on Friday and there will be a constant threat of choppy trading conditions given a lack of liquidity.

By 1600 BST, USD/JPY was hitting lows of 109.37, down 0.62% on the day.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY. The Swissie also edged higher against the Euro, recording one of the largest single day rises since the January 2015 removal of the "peg" placed by the Swiss National Bank. While the French CAC 40 Index fell by 0.6%, the German DAX Index slumped by 1.1% and the UK's FTSE 100 Index plunged by 1.4%. "I think before the end of the year the market goes to new highs and (Treasury) yields go higher".

Oil futures prices rose Wednesday after USA government data showed a fall in crude-oil inventories.


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