Geopolitical tensions push markets lower

Headwinds stacked up for global markets on Tuesday, with stocks slumping across Europe and Asia and havens including gold jumping after North Korea fired a ballistic missile over Japan. Gasoline slipped even as energy companies braced for another hit from Tropical Storm Harvey.

From London to Sydney equities retreated and volatility rose amid classic risk-off moves, with U.S. stock futures also tumbling. Gold surged to the highest this year, while the Swiss franc and the yen were the best-performing major currencies. Most European bonds followed Treasuries higher, while the euro climbed above $1.20 for the first time since 2015, providing yet another drag on the region’s stocks. Gasoline reversed an increase after five days rising, even as Harvey picked up strength again after inundating refineries along the Texas coast.

Japan called Kim Jong Un’s latest provocation an “unprecedented, grave and serious threat,” and asked the United Nations Security Council to hold an emergency meeting. The missile seems likely to reignite the simmering tension between North Korea and the U.S. just days after Secretary of State Rex Tillerson praised the nation for its “restraint.”

The Stoxx Europe 600 Index sank 1.3 percent as of 10:58 a.m. in London, the lowest in almost seven months. The U.K.’s FTSE 100 Index declined 1.3 percent to the lowest in 16 weeks on a closing basis. Germany’s DAX Index dipped 1.7 percent to the lowest in more than five months. Futures on the S&P 500 Index fell 0.7 percent to the lowest in seven weeks.

West Texas Intermediate crude climbed 0.2 percent to $46.64 a barrel. Gold increased 0.9 percent to $1,320.17 an ounce, the strongest in 11 months.

Japan’s Topix index closed 0.2 percent lower after falling as much as 0.7 percent, while South Korea’s Kospi index lost 0.2 percent, paring a drop of as much as 1.6 percent. The S&P/ASX 200 Index in Sydney declined 0.7 percent.