Markets

North Korea Has Markets Nervous But Not Panicked

North Korea Has Markets Nervous But Not Panicked

Wall Street stocks posted their biggest declines in almost three months Thursday as President Donald Trump doubled down on his warnings to North Korea over its nuclear program.

"Most investors will be completely out of their depth in making any assessment on the (North Korea) situation", said Koon Chow, emerging market FX strategist at fund manager UBP. The Japanese market was closed in observance of the Mountain Day holiday.

Asian stocks fell across the board on Friday as the escalation in tensions surrounding North Korea continued to push investors towards safe-haven assets such as the Japanese yen, the Swiss franc and gold.

A statement from the North Korean military called President Donald Trump's warning that the communist nation would face "fire and fury" if it continued its provocations a "load of nonsense".

The dollar index, which tracks the greenback against a basket of six major rivals, edged down 0.1 percent to 93.545 (.DXY), edging closer to last week's 15-month low of 92.548.

In currency markets, the Canadian dollar was trading at an average price of 78.71 cents United States, down 0.20 of a USA cent.

Valeant's stock, which rallied a day before following quarterly results, sank 9.6 percent to C$17.85 after it said its subsidiaries in Australia were the subject of a tax audit.

The utilities index, often seen as a bond proxy because of its companies' slow reliable growth and high dividends, was the only S&P sector that ended the day up, showing a 0.25 percent gain.

The rhetoric between the USA and North Korea has continued to heat up, leading traders to look to safe havens such as gold and treasuries.

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Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories.

The recent resilience of data on the USA economy has not dampened the latest climb, despite depressing prices earlier in the week as reports returned high employment figures ahead of further U.S. inflation information this week. The Nasdaq composite lost 0.3 percent to 6,352.33. Hong Kong's Hang Seng Index plummeted 560.49 points or 2% to 26,883.51.

Australian shares were down 1.3%, set for a weekly loss of 0.6%.

Emerging market stocks lost 1.28 percent.

They were at 2.201 percent early on Friday. News Corp tumbled 5.4% and REA Group slumped 6% after disappointing full-year results.

A report released by the Labor Department showed a modest uptick in consumer prices in the USA in the month of July.

The price of crude oil dropped more than two percent Thursday, the cost of a barrel falling to $48.49.

The dollar weakened after news that US producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

Shares of Snap (SNAP) are also seeing pre-market weakness after the parent of Snapchat reported a wider than expected second quarter loss on revenues that came in below expectations.