Marcha 19, 2018

Safe-haven currencies rise as North Korea tensions brew

11 Agosto 2017, 01:49 | Dolorita Barahona


JIM WATSON  AFP  Getty Images

In Asia, most stock indexes were pressured as geopolitical tensions re-entered the spotlight on Wednesday and China consumer inflation missed expectations. Banks and utilities had some of the biggest gains.

Mike van Dulken, head of research at Accendo Markets, said: "Equities are nursing losses thanks to an unwelcome escalation in geopolitical tensions between the USA and North Korea, both trading nuclear threats that have awoken volatility from its slumber and seen risk assets shunned in favour of the traditional safe havens". Oil prices were headed higher.

The Standard & Poor's 500 index fell 7 points, or 0.3 percent, to 2,466 as of 11:20 a.m. Wednesday on Wall Street. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, with the Dow Jones U.S. defense index up 1.48 percent at 409.58. The Russell 2000 index of smaller-company stocks gave up 4.02 points, or 0.3 percent, to 1,410.15.

Most Asian currencies stumbled, with the Korean won on pace for its biggest fall in almost eight weeks as North Korea warned it is "carefully examining" plans for a missile strike on the US Pacific territory of Guam. While North Korea often threatens to attack the USA, the revelation of this plan was unusual. Oil also regained momentum as data pointed to declining USA inventories.

Japanese stocks finished slightly lower after a choppy session on Thursday, as investors kept a wary watch on tension over North Korea ahead of Japan's long weekend.

Emerging market stocks lost 1.08 percent. Discovery Communications Inc. fell 70 cents, or 2.9 percent, to $23.60.

US stocks closed lower on Tuesday after Trump's comments sparked a late afternoon selling. Netflix lost 1.5 percent.

IN A SKID: Avis Budget Group slumped 6.8% to $31.13 after the auto rental company cut its guidance following a weak second quarter. The stock fell $3.30 to $30.09.

UNDERCOOKED: Blue Apron slumped 12.2 percent after the meal kit seller reported a sequential decline in customers in the second quarter due to a planned reduction in marketing.

Traders snapped up shares in companies that delivered strong quarterly results.

10-Year Treasury Yield 2.24% -0.01%. WTI was last trading at $49.74 a barrel while Brent was at $52.95.

Josh Saul, chief executive officer of London-based The Pure Gold Company, which is among the bullion merchants reporting incremental trading, said: "We've seen a 64% increase in people purchasing physical gold for the first time in recent sessions citing the breakdown of worldwide relations". Most Japanese companies expect the pair to trade between ¥108 to ¥110 this fiscal year.

"Absent actual military action, I think the markets will realize that the rhetoric got head of the actual policy and it is time to calm down a little bit", McMillan said.

Our European opening calls:$FTSE 7509 -0.45% $DAX 12217 -0.61% $CAC 5185 -0.66%$IBEX 10668 -0.62%$MIB 21899 -0.68%. Tokyo's Nikkei 225 tumbled 1.3 percent to 19,738.71 while Seoul's Kospi fell 1.1 percent to 2,368.39. Chinese blue chips closed flat but Hong Kong's Hang Seng fell 0.4 percent.

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