Markets down on geopolitical tensions
On Thursday European equities and U.S. stock futures declined after reports that North Korea is preparing to launch a missile while the pound jumped as the Bank of England held interest rates but signaled the possibility of stimulus reduction.
The dollar erased gains and Treasury yields were little changed as geopolitical tensions mounted, blunting the effect of data that showed U.S. inflation accelerated. A drop in base metals dragged down mining shares. The greenback snapped a three-day winning streak after being supported by a slight increase in expectations of a U.S. interest-rate rise this year and President Donald Trump’s push for bipartisan support on tax reform.
Chinese retail sales, industrial production and fixed-asset investment all slowed last month after a lackluster July as efforts to rein in credit expansion and reduce excess capacity in the world’s second-largest economy hit home. Still, renewed hope for a U.S. tax overhaul was spurred by House Speaker Paul Ryan saying the plan is to have a new tax system functioning next year. Sterling advanced as a majority of policy makers judged that some withdrawal of monetary stimulus may be appropriate if the economy stayed on course.
The Stoxx Europe 600 Index slipped 0.1 percent. Futures on the S&P 500 Index decreased 0.2 percent. Germany’s DAX Index fell 0.3 percent, the first retreat in more than a week. The U.K.’s FTSE 100 Index fell 0.9 percent to the lowest in more than two weeks.
The Topix index fell 0.3 percent at the close in Tokyo. The Hang Seng Index in Hong Kong slipped 0.4 percent. Benchmarks in China also declined. The Japanese yen was little changed at 110.45 per dollar.
Gold rose 0.2 percent to $1,324.94 an ounce. West Texas Intermediate crude gained 1.1 percent to $49.84 a barrel, the highest in more than five weeks. Copper fell 0.8 percent to $2.9565 a pound, the lowest in more than three weeks.