Korean stocks down 1.1 pct on heightened tensions over N. Korea

Lloyd Doyle
Августа 13, 2017

The dollar set an eight-week low against the yen on Friday as escalating tensions between the United States and North Korea triggered yet more investor flight to safety. Japan's Nikkei 225 Index edged down by 0.1 percent, while Hong Kong's Hang Seng Index tumbled by 1.1 percent. Tensions have been rising in the Korean Peninsula, and reached a new level with President Trump's "threat" of "fire and fury" against North Korea if they should proceed with a missile strike against Guam, a USA territory located in the Pacific.

Meanwhile, traders absorbed a report on jobless claims (http://www.marketwatch.com/story/us-jobless-claims-rise-by-3000-to-244000-2017-08-10) that showed that initial claims for us unemployment-insurance benefits continue to reflect a strong labor market, even as they inched slightly higher.

"Obviously we are looking at the increased tensions between the USA and North Korea", said Brad Bechtel, managing director FX at Jefferies in NY.

The North's threat came hours after U.S. President Donald Trump warned that any threat by North Korea to the U.S. will be met with "fire and fury". European stocks (http://www.marketwatch.com/story/european-stocks-fall-as-caution-over-geopolitical-tensions-linger-2017-08-10) also closed in the red. "Safe havens are bid and markets are a little uneasy".

US crude oil futures settled almost 2 percent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers.

Stocks have largely drifted in recent sessions with trading volumes near their lows for the year as the Q2 earnings season has wound down, while the S&P 500 has failed to post a 1% daily move in either direction since the middle of May. The yield on the 10-year Treasury note held steady at 2.26 percent.

The VIX, a measure of how much volatility investors expect in stocks, jumped 10.4 percent.

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Traders snapped up shares in companies that delivered strong quarterly results.

Shares of Michael Kors KORS.N ended up 21.5 percent, after the luxury goods maker raised its full-year revenue forecast.

Ralph Lauren gained $10.38, or 13.3 percent, to $88.53, while peer-to-peer loan company LendingClub added 99 cents, or 18.1 percent, to $6.45.

Benchmark U.S. crude fell 22 cents to $49.17 a barrel on the New York Mercantile Exchange. The euro slid to $1.1752 from $1.1793. Brent crude, used to price global oils, declined 23 cents to $51.67 per barrel in London.

Across the Tasman Sea, New Zealand's S&P/NZX 50 added 0.2% to 7,799.64, led higher by local cargo giant Mainfreight, which was 1.8% firmer.

In Asia, markets were mostly lower after disappointing Chinese trade data.

Sterling was last trading at $1.2998, up 0.07 percent on the day. While the French CAC 40 Index fell by 0.6 percent, the German DAX Index slumped by 1.1 percent and the U.K.'s FTSE 100 Index plunged by 1.4 percent.

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