ibusinesslines.com
ibusinesslines.com August 20, 2017


Korean shares end lower on foreign selling amid tensions over N. Korea

12 August 2017, 11:44 | Kelvin Horton

Major earnings and North Korea worries set to claim the limelight on Wall Street

Financial markets rattled by sharp increase in tensions over North Korea

The dollar slipped to as low as 109.11 yen in early Asian trade on Friday, its lowest level since June 14, when the greenback had fallen to as low as 108.81 yen.

The Dow Jones Industrial Average climbed 0.08% on Friday, Aug. 11, the S&P 500 gained 0.13%, and the Nasdaq added 0.64%.

Stocks are falling in midday trading on Wall Street, led by declines in technology companies and banks.

Positive sentiment was also generated by a report from the Labor Department showing just a modest uptick in consumer prices in the month of July. Top automaker Hyundai Motor fell 2.07 percent to 142,000 won.

Economists had forecast the CPI rising 0.2% in July and climbing 1.8% year-on-year.

Energy stocks retreated 0.5 per cent, despite higher oil prices.

The dollar weakened after news that USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year and pointing to a further moderation in inflation that could delay a Federal Reserve interest rate increase.

Buying interest is somewhat subdued, however, as the ever-escalating war of words between President Donald Trump and North Korea continues to raise geopolitical concerns.


"There is a continuation of flight to the safe havens after remarks on Thursday evening from Trump about North Korea", said Quantitative Commodity Research consultant Peter Fertig. He said that North Korea "can be very very nervous" if it acts on either the United States or its allies, and warned that "things will happen to them like they never thought possible".

"The geopolitical tensions have prompted a risk off trade amid investors", said Naeem Aslam, chief market analyst at Think Markets UK. Trump is issuing a new warning over the North's development of nuclear weapons. "Hopefully Kim Jong Un will find another path!"

Mike van Dulken, head of research at Accendo Markets, said: "Equities are nursing losses thanks to an unwelcome escalation in geopolitical tensions between the USA and North Korea, both trading nuclear threats that have awoken volatility from its slumber and seen risk assets shunned in favour of the traditional safe havens". Silver rose 1.7% to $16.70 per ounce. The index bounced off its lowest closing level in six months. Travel-review website operator TripAdvisor was down 2.7 percent. The single-session equity put/call ratio jumped to 0.83 - the highest since April - and the 21-day moving average rose to 0.65.

Biotechnology, tobacco, and transportation stocks also saw considerable strength, while steel stocks extended a recent move to the downside. The Standard & Poor's 500 index fell 0.2 percent, to 2,474.92.

The CBOE Volatility Index .VIX , a barometer of expected near-term stock market volatility, closed at its highest since the election.

The selling pressure is hitting major European benchmarks, as well. It is poised to end the week down 1 percent.

In the bond market, treasuries extended the upward move seen over the two previous sessions.



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