North Koreaus tensions drag markets

Market report Emma Newlands

European markets sank into the red after North Korea ratcheted up tensions with the United States by firing a ballistic missile over Japan.

The FTSE 100 Index closed down 64.03 points to 7,337.43, after the rocket plunged into waters off the northern Pacific Ocean in a sign of defiance from Pyongyang to the war games being conducted by Washington and South Korea.

Analystsspeculatedwhethernorthkoreawas testing a new intermediate-range missile that it threatened to fire towards the US territory of Guam. David Madden, analyst of CMC Markets UK, said: “Tensions have shifted up a gear, and dealers are dumping stocks as they don’t want to remain long while the political situation plays out.”

On the currency markets, the pound was experiencing a mixed session, slipping 0.3 per cent against the euro to €1.07, but rising 0.1 per cent versus the US dollar to $1.29.

The greenback was down against a host of major currencies, due in part to fears about a potential hit to the US economy from tropical storm Harvey, and helping the euro reach an 18-month high and break through the psychologically important $1.20 mark.

In UK stocks, precious metal miners were among the biggest risers as investors sought out safe havens. Silver miner Fresnillo rose 41p to 1,621p, for example. The biggest risers on the FTSE 100 Index included Randgold Resources, up 345p to 7,915p, Anglo American ,up14p to 1,353.5p, and Associated British Foods ,up 32p to 3,216p. The biggest fallers included ITV, down 7.9p to 153p, Smurfit Kappa, down 69p to 2,280p, and CRH, down 73p to 2,647p. The hostel business was buoyed by Berenberg’s upgrade to “buy” from “hold”, increasing its price target to 370p from 270p. The outsourcing firm fell despite first-half profits rising sharply as it reaped the rewards of growth in the US, where it books most of its revenue.