Markets slide, dollar slumps as North Korea fears spike

Share

The stage was set for the USA indexes to go lower early Wednesday as investors around the world reacted to the rising war of words between the US and North Korea, pushing global market indexes lower.

Trump's comment pushed Wall Street lower, with only utilities making gains, and drove the VIX "fear gauge" of expected volatility on the S&P 500 to its highest in nearly a month.

Investors also drew some encouragement from new government data showing USA inflation at the consumer level inched higher last month.

The ongoing political crisis that has seen North Korea state it was seeking to strike the US Pacific island territory of Guam within days, prompted gold speculator Dennis Gartman, editor and publisher of The Gartman Letter to say he believed gold was on the cusp on a significant break out.

Seven of the 11 major S&P 500 sectors were higher, with the technology's 0.36 percent rise leading the advancers. As the war rhetoric between the United States and North Korea reached a boiling point with both the parties threatening to act, Gold has broken the resistance line around $1267 per troy ounce and reached as high as $1289 per troy ounce.

The Labor Department said on Friday its Consumer Price Index edged up 0.1 percent in July, which was below the 0.2 percent rise expected by economists polled by Reuters.

S&P 500 e-mini futures were down 0.2 percent, hinting at weakness on Wall Street later in the day.

Among the gainers on the rising tensions over the Korean Peninsula, the yen is up 0.3 percent at 110 to the dollar while the Swiss franc has gained 0.6 percent.

CMs of J&K, Bihar, Uttarakhand, Tamil Nadu call on PM Modi
So far, the Centre has not taken any stand on the issue which has unnerved the entire mainstream polity in Kashmir. She has already met with the opposition leader Farooq Abdullah seeking support on the issue.

In Europe, the pan-continental STOXX 600 index fell 0.9 percent, with falls deepening after a auto rammed a group of soldiers in Paris, injuring six, in what officials said was a suspected terrorist attack. Meanwhile, after jumping $10.80 to $1,290.10 an ounce in the previous session, gold futures are climbing $6.50 to $1,296.60 an ounce. While the French CAC 40 Index fell by 0.6%, the German DAX Index slumped by 1.1% and the UK's FTSE 100 Index plunged by 1.4%.

The dollar index, which tracks the greenback against a basket of six major rivals, was almost flat on the day at 93.646, remaining above last week's 15-month low of 92.548.

Priceline Group slid 6.9 percent after the online travel booking service issued a profit forecast that was weaker than analysts were expecting.

The market indexes wavered between small gains and losses for much of the morning, then veered lower by afternoon.

Insurers and banks, which invest in higher-yielding products such as foreign bonds, underperformed after U.S. Treasury yields fell on Wednesday, with the yields on the benchmark 10-year note hitting a six-week low.

US crude shed 20 cents to $48.97 a barrel, while Brent crude fell 26 cents to $51.88 a barrel.

The Swiss franc last stood at 1.1332 per euro, down slightly on the day.

Share