Stocks, dollar extend slide as US-North Korea tensions intensify

Stocks, dollar extend slide as US-North Korea tensions intensify

"It's surprising that given Japan's proximity to North Korea the yen is seeing any benefit from risk aversion", said Lennon Sweeting, chief market strategist for XE.com, in Toronto.

Nervous traders have scrambled to take refuge in traditional safe havens such as gold, silver, bonds, Japanese yen and Swiss franc, dampening interest in risk assets such as equities and industrial commodities.

Spot gold added 0.7 per cent to $1,285.70 an ounce.

The 30-year bond last rose 5/32 in price to yield 2.8107 per cent, from 2.818 per cent late on Wednesday.

The Dow ended a nine-day streak of closing records, falling by 0.24%, while the Nasdaq fell by just under half a percent and the S&P was down by 0.21%.

It is "a bullish sign that the equity markets are rebounding somewhat on a Friday, in spite of the fact that investors will need to wait for two days to react to any geopolitical news that comes out over the weekend", said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.

The so-called fear gauge - the CBOE Volatility Index (VIX), the most widely followed barometer of expected USA stock market volatility, hit its highest since November 8, when Mr Trump was elected president.

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News that USA producer prices unexpectedly fell in July earlier helped send the dollar lower.

Gold got an extra boost after data showed U.S. consumer prices rose less than expected in July, pointing to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year.

Excluding energy and food prices, core PPI fell by 0.1% month-on-month, while analysts anticipated the index to rise by 0.1 percentage points to 0.2%.

The benchmark Korea Composite Stock Price Index lost 39.76 points, or 1.69 percent, to 2,319.71. The Russell 2000 index gave up 24.40, or 1.7 percent, to 1,372.54. The Russell 2000 index of smaller-company stocks picked up 1 point, or 0.1%, to 1,373.

Mr. Trump's remarks on Tuesday that North Korea would face "fire and fury like the world has never seen" pushed Wall Street lower on Tuesday and drove up the VIX "fear gauge" of expected volatility on the S&P 500 higher. Banks and retail chains were also among the big decliners.

OIL: Benchmark U.S. crude lost 24 cents to $48.37 per barrel on the on the New York Mercantile Exchange while Brent crude, used to price global oils, declined 20 cents to $51.70 per barrel in London. Chinese blue chips closed flat but Hong Kong's Hang Seng Index fell 0.4%.

Sterling was sitting at 1.287 against the American currency, while the euro was at 1.17 during Friday trading, as relations between Kim Jong-un's rogue state and the U.S. president continued to deteriorate. Japan was closed on a public holiday.

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