FTSE 100 takes cover from war of words over South Korea

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Equity screens were also awash with red in Asia as investors fled to safe haven assets after US President Donald Trump doubled down on his North Korea rhetoric.

Stocks in France and Germany were down almost 1 percent in early trading, while the FTSE 100 share index in London fell 0.5 percent. Investors are leaving the index to look to traditional safe-havens such as the Swiss franc, the dollar, or gold.

"The war of words taking place between the U.S. and North Korea at the moment, which includes very real threats of action, is taking its toll on investor sentiment".

In the eurozone, the Paris CAC 40 dropped nearly 0.7 percent to 5,081.92 points compared with the closing level on Thursday.

Frankfurt's DAX 30 was also down, shedding some 0.8 percent.

'Stock markets in Europe are still under pressure because of the heightened tensions surrounding North Korea, ' said David Madden, market analyst at CMC Markets UK. Yields on British and European bonds, which move inversely to the price, were lower on Wednesday morning.

Canadian pastor freed N.Korea jail
Asked about Trump's language on North Korea, Freeland said Canada stands by all of its allies, including the United States. A Canadian pastor who was released from imprisonment by North Korea three days ago, returned home on Saturday.

European equities indexes were a sea of red at the close, while Wall Street indices suffered their biggest losses in near three months, deepening their fall after Trump's mid-afternoon remarks further stoked fears of a miscalculation that could lead to catastrophic consequences on the Korean peninsula and beyond. Japan markets are closed for the Mountain Day holiday. On the mainland, the Shanghai Composite declined 0.68% and the Shenzhen Composite shed 0.52%.

The stock market jitters came as North Korea outlined plans to launch missiles aimed at the waters off the coast of the US Pacific territory of Guam.

Tillerson's tone was in sharp contrast to that of U.S. president Donald Trump, who warned on Tuesday any North Korean threat to the USA would be met with "fire and fury".

Markets had earlier stabilised as Tillerson tried to ease tensions, saying he did not believe there is "any imminent threat" to Guam, and expressed hope diplomacy would prevail.

But he also cautioned disappointing inflation data may delay interest rate increases.

On commodities markets, oil advanced initially after figures from the American Petroleum Institute showed a sharp decrease in stockpiles.

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