Swiss franc, yen rise as North Korea tensions brew

Swiss franc, yen rise as North Korea tensions brew

"The latest threats over North Korea have finally escalated to the point where market has been obliged to react", Ric Spooner, chief market analyst at CMC Markets, wrote in a note.

The CBOE Volatility Index .VIX , a barometer of expected near-term stock market volatility, closed at its highest since the election.

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.

Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan had skidded 1.55 per cent, its biggest one-day loss since mid-December, to leave it down 2.5 percent for the week.

This week's increase in tension between North Korea and the US over North Korea's nuclear missile programme is a timely warning for investors to remain diversified, affirms a leading analyst.

The post Russian Federation and Germany weigh in on North Korea war rhetoric appeared first on PBS NewsHour.

The heavyweight financials sector, which accounts for more than a third of the index's weight, was down 0.25 percent as US and Canadian bond yields fell. 'Pretty remarkable, perhaps even extraordinary, considering, ' said Tim Ash, strategist at fund manager BlueBay.

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

The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.0 percent to C$93.36, and Manulife Financial Corp falling 2.8 percent to C$24.93.

The tension between North Korea and the U.S. continues to escalate on a daily basis with each side trading charges against the other and threatening to attack and this has dominated the market headlines over the last few days.

Spot gold prices were unchanged at $1,286.27 a ounce, after touching a two-month high earlier. The tech-heavy Nasdaq composite lost 2.1 percent to 6,216.87. They plunged 2 percent on Thursday on fears of slowing demand and lingering concerns over a global oversupply.

"Limited news flow is what can be blamed for the narrow trading ranges, but expect this to change as we get closer to Friday's U.S. CPI release".

Markets had seen a tentative recovery in risk appetite in U.S. and early Asian trading, but as the war of words resumed Asian stocks dropped back and London, Frankfurt and Paris all lost 0.5 to 1.2 per cent.

However, bank stocks, including Goldman Sachs, Bank of America and Morgan Stanley, were down about 1 percent on the dimming prospects of another rate hike this year.

Steel and copper prices stayed strong in metals markets.

The dollar was further weighed down yesterday by the soft U.S. inflation data. This will give a hint on whether the inflation continues to build, which will help the Fed to hike rates, or whether the recovery in the USA economy, as evidenced in the strong NFP report from last week, was just a flash in the pan and this could then determine the short term direction for gold.