Global markets jarred by North Korea fears

People walk past an electronic board showing stock prices outside a brokerage at a business district in Tokyo

People walk past an electronic board showing stock prices outside a brokerage at a business district in Tokyo

The stage was set for the USA indexes to go lower early Wednesday as investors around the world reacted to the rising war of words between the US and North Korea, pushing global market indexes lower.

"The people of this country should be very comfortable, and I will tell you this: If North Korea does anything in terms of even thinking about attack, of anybody that we love or we represent or our allies or us, they can be very, very nervous", Trump said.

The market volatility - the VIX index, nicknamed " the fear index, had been dashed the night before - remained high compared to the evolution since the beginning of the year.

The U.S. dollar slipped to an eight-week low against the Japanese yen on Thursday as continuing tensions between the United States and North Korea led investors to look for assets viewed as less risky.

"North Korea was fodder for the overnight trade, and as we headed into today we haven't seen any more saber-rattling", said JJ Kinahan, chief market strategist at TD Ameritrade.

U.S. stocks ended lower on Thursday, and Asian markets fell sharply, with Hong Kong's Hang Seng index dropping 2%. The slide deepened after Trump's remarks on North Korea. It is trading at its best level in two months, and is threatening to crack the $1,300 level for the first time since the day following the United States presidential election. "It seems the U.S.is one step closer to engaging in military conflict with North Korea". The Russell 2000 index gave up 24.40 points, or 1.8 percent, to 1,372.54.

The negative headlines provided many investors with an opportunity to pocket some of their recent gains following a string of record highs fueled by strong corporate earnings.

Department store operator J.C. Penney (JCP) is also among the companies due to report their results before the start of trading on Friday. The Korean won fell against the US dollar.

Adding to the modest losses posted in the two previous sessions, stocks moved sharply lower over the course of the trading day on Thursday. Economists had expected prices to rise by 0.2 percent.

BONDS: Bond prices rose.

CURRENCIES: The dollar fell to 109.96 yen from 110.48 yen late Tuesday.

At 3:15pm BST, the Comex gold futures contract for December delivery was up 1.09% or $13.90 to $1,293.20 an ounce, as the precious metal extended overnight gains, of almost 2% stateside, with yet another rally in Asia and Europe. The euro rose to $1.1753 from $1.1752.

In the latest economic data, the consumer-price index (http://www.marketwatch.com/story/us-consumer-inflation-remains-soft-in-july-cpi-shows-2017-08-11) rose a seasonally adjusted 0.1% in July, its fifth straight month of softness, raising more questions about whether inflation will eventually rise to hit the Federal Reserve's 2% annual rate target.

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