Korean shares end lower on foreign selling amid tensions over N. Korea

13 August, 2017, 14:44 | Author: Leticia Walters
  • Losses snap Dow's winning streak

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

"Amid all the sabre-rattling, we expect gold prices to continue to move higher and likely cross the $1,300 an ounce mark in relative short order", said INTL FCStone analyst Edward Meir.

Trump's comments came after reports that North Korea has spurned a new round of sanctions approved by the UN Security Council.

"As a portfolio manager, you say, 'Do I think we'll get a war out of this?'" said Torsten Slok, chief global economist at Deutsche Bank, referring to the back and forth between North Korea and President Donald Trump.

"North Korea doesn't seem like they're going to back down and the U.S. has also made a very strong stance this time".

The North Korea situation isn't the only thing weighing on stocks. North Korea also laid out detailed plans of how it would launch a missile strike on US military bases in Guam.

"Military solutions are now fully in place, locked and loaded, should North Korea act unwisely", he tweeted.

In contrast to the US market, global equities remained weak.

S&P 500 e-minis were down 10.25 points, or 0.41 percent, with 217,904 contracts traded. Economists had expected prices to rise by 0.2 percent.

The primary indicator of the week, consumer prices have slightly advanced in the month of July in the United States, but less than expected, according to figures released Friday by the ministry of Labour. SPDR Gold Shares (GLD), which tracks gold bullion prices, climbed 0.74%. Asian and European stocks continued the sharp decline Friday.

The major averages ended the session just off their worst levels of the day.

Apart from geopolitical worries, some technical analysts like Tom McClellan, editor of the McClellan Market Report, blamed seasonality for this week's sharp retreat given August's record as a weak month for stocks.

Amid the hot rhetoric, US stocks sold off sharply on Thursday, with the S&P 500 falling more than 1 percent.

Trading was thinner than usual, with Japanese markets closed for a public holiday. While the German DAX Index has edged down by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both down by 1 percent. "Indeed, the biggest increases in the price of gold have occurred when the USA bombed Libya in 1986, in the wake of the Gulf War in 1990, and, more recently, when ISIS attacks put oil supplies in the Middle East at risk".

Gold, another classic safe haven asset, was trading at around $1,285 per ounce, up more than two per cent this week and near a nine-week high.

On the currency front, the USA dollar is trading at 108.82 yen compared to the 109.20 yen it fetched at the close of NY trading on Thursday.

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