Markets

European shares fall on Paris incident, North Korea worries

European shares fall on Paris incident, North Korea worries

Investors reacted by driving up the price of gold and bonds, traditional safe-haven plays.

The Dow finally ended 0.2 percent lower at 22,085.34 points.

Meanwhile, equity measures from Hong Kong to Tokyo to Sydney dropped and USA index futures declined, as the won led emerging-market currencies lower. In a statement delivered at his Bedminster, N.J., golf club on Tuesday, Trump said, "North Korea best not make any more threats to the U.S. They will be met with fire and fury like the world has never seen".

The FTSE 100 has suffered a fresh fall amid ongoing tensions between the US and North Korea, which outlined plans to launch missiles aimed at the waters off the coast of the US Pacific territory of Guam. Oil prices were headed higher.

US stocks closed lower on Tuesday after Trump's comments sparked a late afternoon selling.

All three major stock indexes dropped 0.2 per cent at the close, with the Dow Jones Industrial Average finishing at 22,085.34, halting a almost two-week run of closing records.

Sterling edged back above the 1.30 mark against the Dollar on Wednesday, having slid by around half a percent a day previous on expectations for a delay in the Bank of England's interest rate hike timetable.

Disney dropped 3.9 percent, its biggest single-day loss in more than a year.

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The dollar fell 0.4 per cent to 109.865 yen, following a retreat to 109.835, its weakest since mid-June, hurting most bellwether stocks such as automakers, tech shares and banks.

The Swiss and Japanese currencies are often sought in times of geopolitical tension partly because the countries have big current account surpluses.

The S&P fell as much as 0.52 per cent at its session low.

The dollar index was trading 0.2 percent up at 93.73. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman all rose and the Dow Jones U.S. defense index was up 1.6 percent after hitting a record high.

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. Spot gold added 0.4 percent to $1,265.18 an ounce, pulling away from the previous session's two-week lows.

U.S. crude rose 0.69 per cent to US$49.51 per barrel and Brent was last at US$52.66, up 1 per cent on the day.

In the macroeconomic area, the United States government reported that the number of vacancies in the USA rose in June to record of nearly 6.2 million. "Tensions will continue to mount and could eventually develop into a "black swan" event that the markets are not prudently considering", Steve Hanke, professor of Applied Economics at the Johns Hopkins University, told the Reuters Global Markets Forum on Wednesday.