European Markets Sink Further Amid Rising Geopolitical Tensions

14 August, 2017, 05:52 | Author: Leticia Walters
  • While you were sleeping: 'Fire and fury' hits stocks

ANALYST TAKE: "We're seeing significant risk aversion in the markets on Wednesday, with the escalation in tensions between the USA and North Korea triggering moves into safe haven assets", said Craig Erlam, senior market analyst at OANDA. The Dow Jones industrial average slid 204.69 points, or 0.9 percent, to 21,844.01, just shy of its low point for the day.

US stock indexes opened lower on Tuesday as investors paused after a recent record-breaking rally that helped the Dow notch up nine straight sessions of record close.

After a dip of as much as 0.52 percent earlier in the day, Wall Street's three major indexes bounced off intraday lows.

For the week the S&P fell 1.4 percent and the Dow lost 1.1 percent - their largest weekly drops since the week ending March 24 - and the Nasdaq was off 1.5 percent. Copper lost 0.39 percent to $6,455.00 a tonne.

The U.S. and North Korea exchanged verbal threats this week with President Donald Trump warning North Korea that any hostile action would be met with "fire and fury" and Pyongyang threatened to strike Guam, a U.S. territory.

Insurers and banks، which invest in higher-yielding products such as foreign bonds، were the two worst performers on the board after U.S. Treasury yields fell on Wednesday، with the yields on the benchmark 10-year note hitting a six-week low.

Avis Budget Group (CAR.O) fell 5.84 percent as the vehicle rental company's second-quarter profit missed expectations and the company cut its full-year profit view.

"As a result all major USA markets closed lower for the first time in over two weeks, and this weakness unsurprisingly has spilled over into Asia markets as well, as geopolitical tensions prompt some nervousness, particularly since North Korea's state media suggested that they examining the prospect of a missile strike near the U.S. base in Guam".

Manulife Financial Corp was down 1.1 percent to C$25.64.

The broader Topix dropped 0.2 percent to 1،615.56.

Gold and silver rise: The price of gold is up 0.30% to $1,265.28.

United States stock futures were marginally softer. The Shanghai Composite slipped 1.1 percent to 3,240.69.

Across Europe, Gemany's Dax was off 1.2% and the Cac 40 in France dropped by 0.6%.

In Asia, several indexes closed lower overnight. Tokyo's Nikkei 225 tumbled 1.3 percent, while Seoul's Kospi fell 1.1 percent.

In oil, Brent crude was dragged 0.5% lower at 52.46 USA dollars a barrel despite Opec forecasting increased demand for oil next year.

In other energy futures trading, wholesale gasoline was little changed at $1.62 a gallon, heating oil rose 2 cents to $1.65 a gallon and natural gas rose 6 cents to $2.88 per 1,000 cubic feet.

BT down was more than 4%, or 14.4p to 298.9p, while Lloyds fell 2.1p to 64.83p. Hong Kong's Hang Seng was off 0.3 percent.

The dollar was down 0.53% against the yen at 109.48 yen, after briefly dropping as low as 109.53.

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