Asia stocks, dollar extend slide as US, North Korea tensions intensify

President Trump has repeatedly stated that the North will not be allowed to develop such a weapon and says the situation'will be handled

President Trump has repeatedly stated that the North will not be allowed to develop such a weapon and says the situation'will be handled

The Dow saw its biggest dip since mid-May on Thursday, down 205 points, following similar drops in the Asian and European markets.

Euro Stoxx 50 index was down by 1.27 percent and CAC 40 lost 1.4 percent as investors turned cautious.

Nasdaq 100 e-minis were down 1 points, or 0.02 percent, on volume of 49,062 contracts.

"It's surprising that given Japan's proximity to North Korea the yen is seeing any benefit from risk aversion", said Lennon Sweeting, chief market strategist for XE.com, in Toronto.

Trump was responding to North Korea's claim it was completing plans to fire four intermediate-range missiles over Japan to land near the U.S. Pacific territory of Guam. Disappointing company earnings also helped pull the market lower, with financial and consumer-focused companies outweighing gains among health care stocks.

"A week of low volatility has been hit with an unexpected rush to safe havens as the US-North Korean feud has ratcheted up once more", said IG analyst Joshua Mahony.

"The escalation of the geopolitical situation between the US and North Korea is beginning to rattle investors' nerves as was witnessed in the VIX index yesterday", said Peter Cardillo, chief market economist at First Standard Financial. After touching all-time high of 22,179 on Tuesday, Dow Jones closed the day in negative.

USA stock futures were marginally softer on Friday.

Investors have been jittery about North Korea since Tuesday when Trump said any threats from Pyongyang would be "met with fire and fury like the world has never seen". "Yet given the military power of both nations, there is no surprise we are seeing markets shift out of risk assets".

"U.S. markets had previously been becalmed amidst the Goldilocks scenario of strong profit growth, low interest rates and full valuations". "It's hard to tell whether this could trigger a stronger bout of risk aversion". That's the index's lowest level in two months. It was down 0.1 percent at 109.07 yen JPY= , after retreating 0.8 percent on Thursday. The precious metal is often seen as a safe haven for investors during times of uncertainty.

Shares of US department stores Kohl's and Macy's were weak after their results. Copper fell 2 cents to $2.93 a pound.

Silver gained 47 cents, or 2.9 percent, to $16.86 an ounce.

The dollar eased slightly against a basket of major currencies .DXY . The price of gold rose 1.2 percent and the Swiss franc had its best day in almost three years.

US crude was down 0.9 per cent at $48.16 per barrel, on track for a weekly loss of 2.9 per cent.

Crude futures meanwhile extended losses on fears of slowing demand and lingering concerns over global oversupply.

The firm tracks about $2.46 billion of the island's outstanding municipal debt. Shanghai's main index also tumbled 1.6 percent to 3,208.54 while Australia's S&P/ASX 200 dropped 1.2 percent to 5,693.10.

Falling crude prices made oil & gas stocks a weight too, dropping 1 percent with Tullow Oil the top faller.

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