Published: Sat, August 12, 2017
Business | By Max Garcia

FTSE sell-off gathers strength on North Korea fears

FTSE sell-off gathers strength on North Korea fears

US stocks were modestly higher in late morning trading on Friday as investors cautiously dipped back into riskier assets, after a three-day losing streak on concerns over escalating tensions between the United States and North Korea.

The US Producer Price Index has seen its biggest fall in almost a year.

The broad-based S&P 500 fell less than 0.1 per cent at the end at 2,474.02, while the tech-rich Nasdaq Composite Index dropped 0.3 per cent to 6,352.33.

Stocks rose as market bulls saw a buying opportunity after the threat of North Korea pulled Wall Street lower for three days straight. Trump said that further threats would be met with "fire and fury like the world has never seen".

US President Donald Trump ratcheted up his rhetoric toward North Korea on Thursday, saying the reclusive communist country should be "very, very nervous" if it even thinks about attacking the United States or its allies.

More than 430 stocks from all U.S. exchanges hit their lowest levels in 52 weeks or more yesterday, the most for any session since mid-November right after Trump was elected.

In Asia, several indexes closed lower overnight.

"Today's inflation data put the Fed on pause and really diminishes the fact that there's still some noise going around with the North Korea-U.S. situation", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management. Thus, investors were switching from stocks to safe-haven options.

Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific territory of Guam.

The Korean won also continued to fall, down 0.45 percent to 1,147.2. Brent crude, used to price global oils, was down 35 cents to $51.55 a barrel in London.

Nevsun Resources Ltd offset some of the material group's gains, plunging 18.4 percent to C$2.685 after the company reported disappointing quarterly results.

The Canadian dollar was trading at 78.64 cents USA, down from an average price of 78.71 cents United States on Wednesday.

South Korea's KOSPI fell 1.7 percent to its lowest since May 24, but its losses for the week are a relatively modest 3.2 percent.

London's benchmark FTSE 100 index fell back 1.3 percent, driven by losses in the commodity sector. On the Nasdaq, 1,846 issues fell and 953 advanced favoring decliners.

The 30-year bond last /32 in price to yield 2.7933 percent, from 2.794 percent late on Thursday.

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.

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