North Korea talk drags stocks lower; gold, yen rise

Markets extend losses as Korea tensions escalate

The tension and severity of the potential consequences of further escalation have effected equities, thereby making the safe-haven of gold attractive to investors.

"The slight bias to the upside (in stocks) is a result of the CPI number". Nonetheless, the market appeared to be looking for the flies in the ointment - like a rise in Libyan production - in pushing West Texas Intermediates back below $50 per barrel after briefly exceeding that level.

North Korea claimed "only absolute force" can work on someone as "bereft of reason" as Trump and detailed plans to fire a salvo of missiles into waters around the US Pacific territory of Guam.

The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.5 percent to C$92.88, and Manulife Financial Corp falling 4.7 per cent to C$24.43, its largest drop since early August past year.

"The VIX index of implied future volatility on the S+P 500 index (the so-called 'fear index), jumped to a three-month high of over 15, and we saw growth-orientated stocks underperform their value counterparts across developed stock markets".

On the currency front, the U.S. dollar is trading at 108.82 yen compared to the 109.20 yen it fetched at the close of NY trading on Thursday. Japan's Nikkei 225 slipped 0.3 percent, while Australia's S&P/ASX 200 lost 0.5 percent. Hong Kong's Hang Seng dipped 1.1 percent to 27,444.00. Wells Fargo still ended up 0.3 percent at United States dollars 52.71.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialise.

The FTSE 100 firm announced in March previous year that it would run its US-based asset management operation, its UK-based wealth unit, an emerging markets division and Nedbank in South Africa as separate businesses.

Housebuilders Persimmon and Barratt Developments were among the biggest gainers of the day, up 1.58% and 1.02% respectively. It was last up 1.2 percent at 1.1305 per euro.

"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. Futures pointed to further declines on Wall Street, with S&P 500 futures down 0.3 percent at 2,465.70 and Dow futures falling 0.2 percent to 21,986.00.

China's Shanghai Composite Index plunged 51.94 points or 1.6% to 3,209.80, as investors continued to book profits in cyclical sectors.

Yields on core government debt fell.

South Korea's KOSPI fell 1.8 percent to a 9 1/2-week low, taking its losses this week to almost 2.7 percent.

Gold rose 0.6 percent to $1,268 an ounce.

Markets were also lower in Europe and Asia. Investors, meanwhile, are fleeing to more stable investment markets.

Oil prices were lifted by a sustained decline in inventories and as Saudi Arabia prepared to cut crude supplies to its prized Asian customers. Brent crude, used to price global oils, rose 20 cents to $52.10 a barrel in London.

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