Global stocks fall on Trump's North Korea warning; US$ up after data

Shutterstock     
       Swiss stocks were among those under pressure in Wednesday’s trade

Shutterstock Swiss stocks were among those under pressure in Wednesday’s trade

Investors' unease over escalating tensions between the USA and North Korea pushed gold and bond prices higher.

But the prospect of hefty losses on Wall Street stocks was averted when U.S. secretary of state Rex Tillerson said there was "no imminent threat of war" and that Americans could "sleep well at night".

The Nasdaq Composite was down 68.30 points, or 1.08 percent, at 6,284.03.

"It's a clear case of "risk-off" sentiment lifting the yen, as investors focus on the latest developments with North Korea", said Kumiko Ishikawa, FX market analyst at Sony Financial Holdings in Tokyo.

With President Donald Trump warning North Korea of "fire and fury", investors have become concerned that the war of words between Washington and Pyongyang could spiral out of control.

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

Travel and media companies led US stocks lower in afternoon trading Wednesday as some rare earnings disappointments weighed on the market.

The Swiss franc last stood at 1.1332 per euro EURCHF=R, down slightly on the day.

Tokyo's Nikkei 225 share index closed down 1.3 percent at its lowest since June 1 as the strong yen hit exporters, while South Korea's KOSPI index fell 1.1 percent to seven-week lows. Netflix also fell, giving up $2.58, or 1.4 percent, to $175.78.

The Swiss franc jumped on Wednesday and higher yielding currencies such as the Australian dollar tumbled as the latest bout of geopolitical tensions emerging from the Korean Peninsula prompted investors to cut positions. The pan-European FTSEurofirst 300 index rose 0.18 percent and MSCI's gauge of stocks across the globe shed 0.19 percent after touching a record intraday high.

The yen rose to 128.95 against the euro, 142.66 against the pound and 109.90 against the USA dollar, from yesterday's closing quotes of 129.40, 143.12 and 110.06, respectively.

Benchmark US crude fell 22 cents to 49.17 dollars a barrel on the New York Mercantile Exchange. "Risk aversion is still very much a concern for markets", said Shaun Osborne, chief currency strategist, at Scotiabank in Toronto.

Oil prices rose nearly half a percent in today's trading following a bigger-than-expected drop in U.S. crude inventories. Lockheed Martin, Raytheon, General Dynamics and Northrop Grumman were all up, with the Dow Jones U.S. defense index up 1.48 percent at 409.58. Brent crude, the global standard, lost 23 cents to 52.14 dollars a barrel in London.

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