World equity markets jarred by North Korea fears

LONDON: World equity markets were lower Friday on the back of simmering tensions between US and North Korea, dealers said.

Traders’ screens were in the red in Asia and Europe as investors fled to safe haven assets after US President Donald Trump doubled down on his North Korea rhetoric.

But in the US, Wall Street opened tentatively higher as consumer inflation data showed signs of life after months of weakening price pressure.

“Equities look set to end this week on a downer, as geopolitical uncertainty regarding North Korea shakes volatility from its 2017 slumber,” said Accendon Markets analyst Mike van Dulken.

“This has taken equities from recent highs, dragging metals and oil with them, the preference for safe havens sending gold and silver to two-month highs and reviving interest in bonds.”

Markets reacted with dismay to Trump’s fresh warning that his earlier threat to unleash ‘fire and fury’ on the reclusive nucleararmed state may not have been ‘tough enough’.

North Korea raised the stakes further with a detailed plan to send a salvo of missiles towards the US Pacific territory of Guam.

“As has been the case for much of the week, markets are heading into the weekend on a negative note as traders seek safety ahead of what could be a potential risky couple of days,” said Oanda analyst Craig Erlam .

“The war of words between Donald Trump and North Korean officials has stepped up in recent days and has put investors on edge, prompting a more risk averse approach in the markets.”

Geopolitics aside, investors would also focus on US economic data and monetary policy, with inflation data being released and two Federal Reserve policymakers making an appearance, Erlam said.

Rising costs for housing, medical care and food helped push the Consumer Price Index (CPI) up 0.1 per cent in July, seasonally adjusted, after no change in June and a 0.1 decrease in May, the US Labor Department said. — AFP