Gold surges as United States and North Korea ratchet up nuclear tensions

Gold surges as United States and North Korea ratchet up nuclear tensions

The Nikkei slumped to its lowest close for nearly three months Wednesday, leading an Asia-wide sell-off sparked by President Donald Trump's apocalyptic warning over North Korea's weapons program.

The S&P 500 dropped the most since May and MSCI's gauge of stocks across the globe .miwd00000pus lost 1.1 percent in its third straight day of declines, as it pulled further back from all-time highs. A batch of disappointing company earnings also helped pull the market lower, with consumer-focused companies and technology stocks among the biggest decliners.

The utilities index .SPLRCU , often seen as a bond proxy because of its companies' slow reliable growth and high dividends, was the only S&P sector that ended the day up, showing a 0.25 per cent gain.

"The market has been looking for an excuse to sell off and North Korea and the president gave the market that excuse", said David Schiegoleit, managing director at the U.S. Bank Private Client Wealth Management.

He goes on to say: "In all likelihood the North Korea threat will persist for years to come, with the U.S, and increasingly China, attempting to contain and restrain Kim Jong-un". The yield on three-year Treasurys fell 2.0 basis points to 1.804 percent and the return on benchmark five-year government bonds shed 2.0 basis points to 2.004 percent.

The Standard & Poor's 500 index rose 4 points, or 0.2 percent, to 2,442 as of 2:43 p.m.

The Nasdaq Composite lost 0.2 percent, to 6,370.46.

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Losses in health care and consumer-focused companies pulled United States stocks broadly lower Tuesday, snapping a 10-day winning streak for the Dow Jones industrial average. All the indexes are down for the week. With Asian bourses and United States stock futures weakening early on Wednesday, the safe-haven 10-year Treasury yield was last down 3 basis points.

"What has changed this time is that the scary threats and war of words between the USA and North Korea have intensified to the point that markets can't ignore it", said Shane Oliver, head of investment strategy at AMP Capital in Sydney.

In commodities trading, crude oil futures are slipping $0.10 to $48.49 a barrel after tumbling $0.97 to $48.59 a barrel on Thursday. Northern Star Resources was up 3 per cent, while Evolution Mining rose 2 per cent, Newcrest Mining gained 2.3 per cent and Resolute Mining rose 2.1 per cent. Westgold Resources was the biggest gainer, rising 6.6 per cent. Australia's S&P/ASX 200 dropped 1.2 percent, while Japan was closed on a public holiday.

The Korean won continued to fall versus the dollar, down 0.13 percent to 1,143.5 on Friday for a 1.6 percent decline on the week. Japan's Nikkei 225 Index edged down by 0.1%, while Hong Kong's Hang Seng Index tumbled by 1.1%.

The UK's FTSE 100 index fell 66.36 points, or 0.9%, to 7,323.58 in early trade, having dropped 1.4% on Thursday.

After touching a more than two-month high at US$1,291.86, spot gold last added 0.2 per cent to US$1,288.81 an ounce. Brent crude, used to price global oils, gained 10 cents to $52.24 in London.

In currencies, the yen strengthened 0.64 per cent versus the greenback at 109.37 per dollar.

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