TSX closes 143 points lower, gold rises amid US-North Korean tensions

12 August, 2017, 16:13 | Author: Terri Saunders
  • TSX closes 143 points lower, gold rises amid US-North Korean tensions

Stocks around the world fell sharply on Thursday and investors moved into the yen, gold and other safe-haven assets amid more aggressive talk between the United States and North Korea.

Britain's top stock market the FTSE 100 slipped by around 0.6 per cent, as a war of words erupted between U.S. president Donald Trump and North Korean dictator Kim Jong-Un. The blue-chip index ended the week down 2.7%. Natural gas gained 2 cents to $2.82 per 1,000 cubic feet. Its shares slid $9.77, or 5.3 percent, to $174.02. The Nasdaq added 39.68 points, or 0.6 percent, to 6,256.56.

Stocks plunged, while US Treasuries and gold climbed, as US President Donald Trump's latest comments further inflamed tension with North Korea.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalisation drop from a record high US$61.36 trillion on Monday to US$60.43 trillion at the close on Thursday.

The reclusive state raised the stakes further on Thursday with a detailed plan to send a salvo of missiles towards the USA territory of Guam.

Oil also regained momentum as data pointed to declining United States inventories. "For now, the North Korea situation bears watching as there's lots of tough talk, but we'll see if it escalates", said Kinahan. The strength in the sector comes as gold for December delivery is jumping USD11.30 to USD1,290.60 an ounce.

USA stock futures ESc1 were marginally softer on Friday.

Separately, U.S. producer prices unexpectedly fell in July, recording their biggest drop in almost a year, weighed down by declining costs for services and energy products.

Palladium prices were flat at $891.00 per ounce.

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Excluding food and energy prices, core producer prices still dipped by 0.1% in July after creeping up by 0.1% in June.

"If we see an escalation of the rhetoric then this sell off could be more than a flash in the pan".

"Both (PPI measures) were well below consensus and give us no hope that consumer price inflation is going to materially beat expectations", said Chris Weston, chief market strategist at IG Markets. "Perhaps we are done with the interest rate for this year", Aslam noted.

On the London Stock Exchange, miners were the main drag for the FTSE 100.

Housebuilders Persimmon, Taylor Wimpey (LSE: TW.L - news) and Barratt fell by 2.8 to 3% on weak house price data. The Anglo-South African insurer and investment group said its interim profit and revenue grew strongly, but said it is taking a careful approach to dividends as it prepares to separate out its operations. Its net profit came in at A$445 million ($351.8 million), under the A$523 million reported past year.

Revenue rose to GBP10.82 billion from GBP7.48 billion. That lifted the year-on-year increase in the CPI to 1.7% from 1.6% in June. The Stoxx Europe 600 fell 1%.

Traders snapped up shares in companies that delivered strong quarterly results. The firm will buy 75% stake in a new company set up with the franchisee and the deal is expected to complete in September. Job openings jumped 8 per cent to 6.2 million, the Labor Department said Tuesday.

Several Asian corporates are expected to report earnings during the day.

The economic calendar is also thin with Japan GDP data at 0050 BST and China retail sales at 0300 BST, together with industrial production data.

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