Electronics

Stocks tumble on North Korea worries

Stocks tumble on North Korea worries

"Although it is considered highly unlikely that this tension will escalate into a nuclear war, the market still needs to see how President Trump will eventually deal with his advocating "fire and fury" against North Korea's threat", said Margaret Yang Yan, market analyst at CMC Markets Singapore.

US producer prices unexpectedly fell in July, pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

The CBOE Volatility Index - a measure of investors' expectations for swings in the S&P 500 over the next 30 days - surged 44% to 16.04 Thursday - its highest level since U.S. Election Day.

"In all likelihood the North Korea problem will persist for years to come, with the U.S, and increasingly China, attempting to contain and restrain Kim Jong-un", said Tom Elliott, global investment strategist at deVere Group. They are looking for confirmation that the Fed is sticking with plans for a possible December interest rate hike.

But although US equities on Wednesday managed to close only slightly down even after Trump's warning that "fire and fury" would rain on North Korea, on Thursday the chickens came home to roost on Wall Street. Macy's sank 10.3 per cent and Kohl's lost 5.8 per cent. Hong Kong's Hang Seng dipped 1.1 percent to 27,444.00.

The Korean won also continued to skid, sliding 0.4 percent to 1,146.2, below its 200-day moving average.

South Korea's KOSPI fell 1.7 per cent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 per cent.

Many world stock markets have hit record or multiyear highs in recent weeks, leaving them vulnerable to a sell-off, and the tensions over North Korea proved to be the trigger.

"Pretty remarkable, perhaps even extraordinary, considering", said Tim Ash, strategist at fund manager BlueBay.

MARKETS OVERSEAS: In Europe, Germany's DAX was down 1.1 percent, while France's CAC 40 fell 1.4 percent.

Man City's Pep Guardiola: I'm not under extra pressure this season
But the new keeper says Bravo is a quality player and has come back in top form after impressing with Chile at the Confederations Cup in the summer.

Low U.S. Treasury yields are also weighing on the dollar.

Seagate Technology gained 2.3 percent after investor ValueAct disclosed that it had acquired a 7.2 percent stake in the company.

USA stocks closed higher on Friday as Wall Street clawed back from a sharp decline in the previous session but the market still posted a weekly loss on lingering geopolitical uncertainties.

Sterling was last trading at US$1.3007, up 0.25 per cent on the day.

The dollar held steady at 110.02 yen JPY= , having pulled up from Wednesday's low of 109.56 yen, its lowest level since June 15.

The data comes amid tepid inflation that has remained below the Fed's 2% target, despite low unemployment.

The decline in equity markets and a dip in U.S. bond yields triggered fresh demand for precious metals and gold pushed to fresh 2-month highs around $1,288.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in U.S. crude inventories, leaving prices volatile.

The dollar was steady against a basket of six major currencies at 93.412 after falling 0.2 percent on Thursday, with disappointing USA inflation and jobs data adding to the greenback's woes.


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