Economy

United States stocks fall on North Korea worries

United States stocks fall on North Korea worries

Trump's words were in response to North Korea threatening to attack USA territory Guam.

The FTSE 100 Index closed down 79.98 points to 7,309.96, with President Donald Trump tweeting that the U.S. military is "locked and loaded" as he warned North Korea over its continuing threats. However, if the situation becomes more than a war of words or if North Korea becomes more successful with its missile launches, that would change the situation immediately.

The pound was down 0.1% against the euro at 1.10.

US stock-index futures pointed to more losses for Wall Street on Thursday as tensions between the USA and North Korea showed few signs of easing.

The Nasdaq Composite was down 37.30 points, or 0.59%, at 6,315.03.

" The high drama has prompted traders to take their cash out of stocks, and invest it in safer assets like gold".

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Markets in Italy, France and Germany also saw declines.

A rise in the yen, which often draws safe-haven buying in times of uncertainty, is bad for Japanese exporters because it shrinks the value of their repatriated profits.

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.

Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea have proved to be the trigger.

The dollar index was last down 0.07% at 93.41.

"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. The data suggested little sign of inflationary pressure within the economy.

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"Heightened geopolitical risks overnight have seen the markets flip from risk-on to risk-off and we have to wait and see how long this move runs before adding some positions", said Viraj Patel, an FX strategist at ING in London.

Disappointing earnings also helped pull the market lower Wednesday.

Financial stocks underperformed after U.S. Treasury yields fell as bond prices rose in a flight to safety by nervous investors.

The benchmark US yield on Thursday was just above 2.2 percent, at its lowest level since late June, as investors bought up Treasuries, a classic safe harbor.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories, leaving prices volatile.

The price of crude oil dropped more than two percent Thursday, the cost of a barrel falling to $48.49.

Markets extend losses as Korea tensions escalate
The comments follow reports that the North has mastered a technology needed to strike the United States with a nuclear missile. Equity benchmarks in Germany and France on Wednesday fell by more than 1% each, marking their worst sessions since July 21.