FTSE Slips on North Korea Fears

Paterniano Del Favero
Agosto 11, 2017

David Madden, market analyst at CMC Markets UK, said: "European stocks have suffered greatly as traders were prompted to cut-and-run due to the escalating tensions between the U.S. and North Korea".

European stock markets fell further in opening trade on Friday on intensifying fears over North Korea, dealers said. "The level of risk aversion we're seeing suggests traders still believe the prospect of military action is very small but precautions are still being taken nonetheless, as this still has the potential to escalate very quickly and unexpectedly".

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. The grim mood also spread to eurozone markets, with the French CAC 40 falling 0.9%.

Frankfurt's DAX 30 was 0.4 percent lower at 11,961.60 points.

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.

Safe havens benefited from the move away from stocks - gold rising again to around $1,290 an ounce after surging 1.3 percent Wednesday - but other risky assets such as oil and copper held their price.

"It could be another rough day for European equities", said ETX Capital analyst Neil Wilson. Asian shares meanwhile have tracked the United States lower this morning.

"The uncertainty surrounding the situation has been the main driver of the markets recently".

Pyongyang responded by saying it was studying plans for an attack on Guam, a US territory and home to Andersen US Air Force Base.

Trump said on Thursday that his comment earlier in the week that North Korea should face "fire and fury" if it continued to make threats maybe "wasn't tough enough", the New York Times reported.

On commodities markets, oil advanced after figures from industry group the American Petroleum Institute showed a sharp decrease in stockpiles, a clear indication of an easing supply glut.

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