Marcha 24, 2018

North Korea Tensions Hit Global Stock Markets

12 Agosto 2017, 09:53 | Dolorita Barahona

North Korea’s Kim Jong Un Fueling the Korea Peninsula crisis

Kim Jong Un

Investors took more profits as rising tensions between the USA and North Korea weighed on investor sentiment for a second straight session, but stocks pared declines near the close to leave the major averages at their highs of the day.

Toyota Motor Corp dropped 1.6 percent, Honda Motor Co shed 1.2 percent, TDK Corp stumbled 2.0 percent and Advantest Corp slipped 2.6 percent. In Asia, markets were mostly lower after disappointing Chinese trade data.

Heavyweight Apple could have provided some support for trading with a 0.8 percent rise in prices.

The pan-European FTSEurofirst 300 index .FTEU3 lost 1.11 percent.

Instead, investors turned to assets that tend to benefit in times of geopolitical and financial stress. On the Nasdaq, 1,685 issues fell and 615 advanced favoring decliners.

"I would expect the markets to react again pretty negatively to any more tough talk from either side, but for now, everybody seems to have settled down, and we'll see what happens".

Equities slid, while US Treasuries and gold climbed, as US President Donald Trump's latest comments further inflamed tension with North Korea.

Silver prices also continued to move higher over the last 24 hours and now they threaten to break through the key $17 region which should only be a matter of time if the tensions between North Korea and the U.S. continue to dominate the headlines.

The sabre rattling sent tremors throughout stock markets globally as investors responded to rising geopolitical tensions by selling off stocks and moving to traditional safe havens such as gold and USA government bonds.

"It's awesome when you consider the headlines just how calm the equity markets are, how they've taken things in their stride", said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.

Instead, investors headed for safe havens, such as gold, which gained as much as 1.2% - a near two-month high - in Wednesday trading.

Escalating tensions over North Korea's nuclear ambitions rattled investors Thursday, helping to pull global share benchmarks lower.

Politics lifted US defence stocks.

Steel and copper prices stayed strong in metals markets. Homebuilders also dragged the index down as a report by the Royal Institution of Chartered Surveyors showed that the monthly house price balance dropped to +1% from +7% in June and below the expected 8% expansion. Brent crude, used to price global oils, added 4 cents to $52.74.

However, the situation does not represent a crisis, the official from Seoul's presidential office Cheong Wa Dae said, noting the North Korean threat may have been multipurposed but not to incite an actual conflict. Lockheed Martin LMT.N , Raytheon RTN.N , General Dynamics GD.N and Northrop Grumman NOC.N all rose and the Dow Jones U.S. defence index .DJUSDN was up 1.6 per cent after hitting a record high.

Sociedad Quimica y Minera de Chile, one of the world's largest producer of iodine - a substance used to combat radiation - has seen its share price increase by over a third since the start of July.

Mr. Trump's threatening rhetoric on North Korea "is nearly entirely responsible for the pullback", said Randy Frederick, vice president of trading and derivatives for Charles Schwab.

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