North Korea talk drags stocks lower; gold, yen rise

A man looks at an electronic board showing Japan's Nikkei average outside a brokerage at a business district in Tokyo Japan

On Tuesday, the DAX added 0.3 percent, the CAC 40 gained 0.2 percent and the FTSE rose 0.1 percent.

The Dow and S&P 500 inched higher on the day but they both posted their largest weekly percentage drops since late March.

ASIA'S DAY: Tokyo's Nikkei 225 tumbled 1.3 percent to 19,738.71 and Seoul's Kospi fell 1.1 percent to 2,368.39.

The Hang Seng Index in Hong Kong lost 0.7 perc ent and China's Shanghai Composite Index was down 0.2 per cent.

Energy stocks retreated 0.5 per cent, despite higher oil prices.

But others believe North Korea has no intention of backing down.

The Dow closed down 205 points Thursday, in its biggest decline since May 17, after U.S. President Donald Trump rejected criticism that his threats to release "fire and fury" had been too inflammatory. Pyongyang said it was examining plans for attacking Guam, a US territory in the Pacific with a military base.

Neil Mellor, a currency strategist with Bank of New York Mellon in London, said the pound was "drifting towards the lows from last month against the dollar". He noted that when the North test-fired a missile in July, stocks rose.


"Tensions are high. Markets have taken a little notice", said Greg McKenna, an analyst at AxiTrader. "They may increase the market's volatility for a couple of days". The Korean won fell against the US dollar.

Additionally, China weighed in on the standoff, saying in an editorial in state-run Global Times (http://www.globaltimes.cn/content/1060791.shtml) that Beijing will intervene if the USA strikes first against North Korea. For the week, the London index fell 2.7%, the biggest loss since the week ended April 21.

"However, if the rhetoric does ramp up, even without actual nuclear follow through, this could spook the market and make it hard for stock indices to rally into late summer due to the fears for global trade and global growth".

The pan-European FTSEurofirst 300 index (.FTEU3) lost 1.11 percent. The number of people quitting their jobs also dropped.

"The level which we are looking at now is $1,300".

The U.S. consumer-price index, set for release before Wall Street opens, will be closely monitored by investors for clues on inflation and the Fed's next move, said Mr. Kamal.

If the North Korean regime "does anything" to the U.S. or a United States ally "things will happen to them like they never thought possible", he told reporters on Thursday, according to Bloomberg.

"The won has recently been reacting quite sensitively to Trump's comments and investors' anxieties worsened today as the North came up with an aggressive response", said Jung Sung Yoon, a foreign exchange analyst at Hyundai Futures. It was down 0.1 percent at 109.07 yen JPY= , after retreating 0.8 percent on Thursday.

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