Stocks, dollar extend slide as US-North Korea tensions intensify

Judith Bessette
Agosto 12, 2017

Ongoing tensions between North Korea and the United States weighted on stock markets once again Friday.

In an apparent response to Trump's tweet, a statement issued by North Korea's official KCNA news agency claimed the president is "driving the situation on the Korean peninsula to the brink of a nuclear war".

Globally, gold rose 0.23 percent to Dollars 1,288.70 an ounce in NY in yesterday's trade. Australia's S&P/ASX 200 edged down almost 0.1 percent to 5,760.90, while South Korea's Kospi fell 0.5 percent to 2,357.84.

Simmering tensions between the USA and North Korea have come back to the boil in recent days after Pyongyang disclosed plans to fire missiles over Japan to land near America's Pacific territory of Guam.

Geopolitical tensions between the United States and North Korea has led to a break of key resistance line for the gold price.

The Korean won KRW=KFTC also continued to skid, sliding 0.3 percent to 1,145 won to the dollar, after earlier sinking to its lowest level in a month. But for the week the S&P 500 lost 1.3 percent, its worst weekly showing since March.

While the data gave investors appetite for growth sectors such as information technology and biotechnology it soured them to rate-sensitive stocks such as banks, said Keith Lerner, Chief Market Strategist, SunTrust Advisory services in Atlanta.

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The index was also dragged lower after Beijing ordered probes into three major Chinese social networking platforms over outlawed content. The Hang Seng index ended down 1.1% at 27444.00 points.

Drops among cyclical sectors weighed on the index, with heavyweight miners Rio Tinto, BHP Billiton, Anglo American and Glencore all dropping between 2.9 to 3.1 per cent as tensions between the U.S. and North Korea hit riskier assets, including metals prices.

The indicated USA market moves reflect a selloff across global stock markets Friday.

Trucking and software stocks are also seeing notable strength in mid-day trading, while steel stocks have moved sharply lower on the day.

"From a geopolitical perspective, we understand why the escalation in tensions will have shaken some of the complacency out of investors", said Eric Wiegand, senior portfolio manager at U.S. Bank Private Client Wealth Management.

Benchmark 10-year notes last rose 5/32 in price to yield 2.2255 per cent, from 2.242 per cent late on Wednesday.

The euro eased 0.1 per cent to $1.1766, staying below a high of around $1.1910 set last week, the euro's strongest level in 2-1/2 years. To Reuters citing Peter Kenny, in charge of the market strategy in Global Markets Advisory Group, " market participants are looking for any reason for a reset of course. September West Texas Intermediate crude fell $0.97, or 2%, to $48.59 a barrel on the New York Mercantile Exchange.

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