EUROPE MARKETS: European Stocks Slide After U.S. And North Korea Cross Swords
August 09 2017 - 12:15PM
Dow Jones News
By Carla Mozee, MarketWatch
Novo Nordisk shares fly higher on raised outlook
Stocks across Europe closed sharply lower Wednesday as tensions
between the U.S. and North Korea escalated.
In Frankfurt, the DAX 30 dropped 1.1% to 12,154.00, and in
Paris, the CAC 40 index was fell 1.4% to 5,145.70. Those marked the
worst sessions for those benchmarks since July 21, FactSet data
showed.
Those moves left the Stoxx Europe 600 down by 0.7% to 379.84,
with only the utilities sector, considered defensive, notching a
small gain at the close.
Bank shares were hit hard Wednesday and that pulled the Stoxx
Europe 600 Bank Index down 1.4%, the biggest decline in three weeks
and the first loss in five sessions.
Regional stocks remained lower throughout the session after
North Korean leader Kim Jong Un made an explicit threat to strike a
U.S. military base in Guam
(http://www.marketwatch.com/story/north-korea-threatens-missile-strike-on-us-base-on-guam-2017-08-08).
His order, reported in state media, came hours after U.S.
President Donald Trump late Tuesday warned Pyongyang not to "make
any more threats" to the U.S, saying it would face a "fire and
fury" response
(http://www.marketwatch.com/story/trump-today-president-says-north-korea-faces-fire-and-fury-if-it-doesnt-halt-threats-2017-08-08)
"like the world has never seen." Trump's comments came after a
Washington Post report
(https://www.washingtonpost.com/world/national-security/north-korea-now-making-missile-ready-nuclear-weapons-us-analysts-say/2017/08/08/e14b882a-7b6b-11e7-9d08-b79f191668ed_story.html?utm_term=.0938becb046e)
that North Korea has built a miniaturized nuclear warhead.
Korea's Kospi stock benchmark lost 1.1% as geopolitical concerns
grew, clipping its year-to-date gain to 16.9%. U.S. stocks also
retreated
(http://www.marketwatch.com/story/us-stock-futures-pull-back-as-north-korea-threatens-guam-2017-08-09),
although Walt Disney Inc. shares
(http://www.marketwatch.com/story/disney-and-netflix-what-the-split-means-for-viewers-2017-08-08)(DIS)
were also a major source of pressure on the Dow Jones Industrial
Average .
"If tensions between the U.S. and North Korea escalate further,
we think that the implications for equities in South Korea and
elsewhere will remain limited provided that war does not actually
break out," wrote Oliver Jones, assistant economist at Capital
Economics.
"This was the case for U.S. equities during the 1962 Cuban
missile crisis, when the world arguably came closest to outright
conflict between two nuclear-armed powers," Jones said.
Back on the Stoxx 600, shares of gold miners Fresnillo PLC
(FRES.LN) and Polymetal International PLC (POLY.LN) leapt 4.9% and
3.3%. Those shares tracked a climb of more than 1% in gold prices ,
to nearly $1,280 an ounce.
A more than 1% climb in the Swiss franc against the dollar
during the session pressured Swiss stocks. The SMI dropped 135.18
points, or 1.5%, to 9,027.15. That was the largest point loss for
the Swiss equity benchmark since June 29.
The euro fetched $1.1748, not far off from $1.1752 late
Wednesday in New York.
In other developments Wednesday, shares of Novo Nordisk A/S
rallied 7.9%. Their best session since March 2015 came as the
Danish drugmaker raised its growth targets for the year
(http://www.marketwatch.com/story/novo-nordisk-profit-flat-upbeat-on-sales-outlook-2017-08-09-2485406)
on expectations of robust sales of its type-2 diabetes drug Victoza
and long-acting insulin Tresiba.
In London, the FTSE 100 fell 0.6% to 7,498.06
(http://www.marketwatch.com/story/ftse-100-falls-as-us-north-korea-tensions-prompt-flight-to-safety-2017-08-09),
and Spain's IBEX 35 slumped 1.3% to 10,596.00.
(END) Dow Jones Newswires
August 09, 2017 13:00 ET (17:00 GMT)
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