Investors seek safety as N. Korea tension escalates; stocks end off lows

People walk past an electronic board showing stock prices outside a brokerage at a business district in Tokyo

South Koreans watch a television displaying news broadcasts reporting on North Korea at a station in Seoul today.

In early trading, France's CAC 40 fell 1.5 per cent to 5,141.37 points and Germany's DAX lost 1.2 per cent to 12,144.54.

MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.6 percent.

He said:"Financial markets are already taking precautions against an escalation with haven buying happening in the Swiss franc, gold and the Japanese yen, though why anyone would want to buy a currency which is on the front line of a possible conflict is beyond me".

After a few days of consolidation and ranging, we saw a day of action in the gold prices yesterday.

Nitesh Shah, director and commodities strategist at ETF Securities, said Trump's latest comments of "fire and fury" had "made the world nervous about the threat of nuclear war".

Trump took specific aim at North Korean leader Kim Jong Un, saying, he had "disrespected our country greatly", and would not be "getting away with it".

Nitish Shah at ETF Securities said, "We believe continued sabre-rattling. could take gold prices higher still", adding "There is genuine concern, hence the fall in the dollar, (but) as ever with Trump, it's unclear how quickly the rest of the USA machinery will calm him, so rises are not yet huge".

Stock benchmarks in South Korea, Hong Kong and Shanghai were all down more than 1.5% by midday, with Australia not far behind.

Japanese stocks were flat in choppy trade on Thursday morning as geopolitical concerns over North Korea's threats of missile strikes receded، Reuters reported.

The mood on markets was decidedly risk off leaving stock markets lower. "Hard to assess political risk is now intruding on this scenario". It hit a 15-month low of 92.548 on August 2.

CURRENCY: The dollar declined to 109.77 yen from Tuesday's 110.34.

Although Japan could be in the front line of any clash with North Korea, the yen is benefitting because Japan is the world's biggest creditor nation and Japanese investors tend to repatriate funds in times of stress, attracting other flows. Oil also regained momentum as data pointed to declining USA inventories.

Canadian government bond prices were higher across the yield curve, with the benchmark 10-year CA10YT=RR bond rising 46 Canadian cents to yield 1.853 percent and the two-year adding 3.5 Canadian cents to yield 1.223 percent.

Scout24 was a stand-out performer, jumping 6.6 percent to a seven-month high after the German online classifieds company said it had won back customers in the second quarter.

The dollar eased slightly against a basket of major currencies .DXY to 93.356.

Gold rose 0.6 percent to $1,268 an ounce. It is set for a weekly gain of 2.4 percent. Brent crude LCOc1 was up 30 cents at $53.00 a barrel and US crude was up 22 cents at $49.78.

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