LONDON MARKETS: FTSE 100 Slips As Renewed U.S.-North Korea Tensions Sap Risk Appetite
August 21 2017 - 05:32AM
Dow Jones News
By Carla Mozee, MarketWatch
Miners are a bright spot in Monday's trade
U.K. stocks sagged Monday, falling alongside European and Asian
stocks as tensions between the U.S. and North Korea came back in
focus.
The FTSE 100 shed 0.1% at 7,313.97, but pared the loss as
consumer goods and tech shares joined the basic materials sector in
moving higher. The index on Friday fell 0.9%
(http://www.marketwatch.com/story/ftse-100-drops-as-travel-shares-rattled-after-terrorists-attacks-in-spain-2017-08-18),
reducing its weekly advance to 0.2%.
European and most Asian stocks started the week in the red as a
new cycle of escalation on the Korean Peninsula appeared set to rev
up as U.S. and South Korea kicked off annual military exercises
(http://www.marketwatch.com/story/tensions-expected-to-rise-as-us-south-korea-start-annual-war-games-2017-08-20).
Pyongyang warned on Sunday that the upcoming exercises are
"reckless behavior driving the situation into the uncontrollable
phase of a nuclear war."
"North Korea tensions should remain elevated with the U.S. and
South Korea holding joint military exercises from today to 31
August. North Korea condemns the joint exercises as a rehearsal for
an invasion," said Sue Trinh, head of Asia FX strategy at RBC, in a
note.
"We think volatility is more likely to pick up in and around the
week beginning Sept. 4, coinciding with implementation of the
latest sanctions and North Korea Foundation Day," she said.
Tensions between the U.S. and North Korea recently led investors
to flee so-called risk assets and pick up haven assets including
gold , bonds and the Swiss franc .
Mining shares managed to push higher even as a risk-off mood
hung over the equity markets. Iron ore heavyweights BHP Billiton
PLC (BLT.LN) (BHP.AU) (BHP.AU) and Rio Tinto PLC (RIO) (RIO) (RIO)
were up by 1% and 0.9%, respectively. Earlier Monday, rival
Australian iron ore producer Fortescue Metals Group Ltd. (FMG.AU)
raised its dividend payout after annual profit more than doubled
(http://www.marketwatch.com/story/fortescue-metals-profit-jumps-flags-dividend-rise-2017-08-21)
on strong iron ore prices.
Metals prices were broadly higher, and shares of copper miner
Antofagasta PLC (ANTO.LN) picked up 1.5% and Glencore PLC (GLEN.LN)
moved up 0.5%.
Housing shares were able to advance Monday even as Rightmove
said the average asking price for houses fell 0.9% in August.
Persimmon PLC shares (PSN.LN) rose 1.5%, Barratt Developments
(BDEV.LN) turned up 0.3% and Taylor Wimpey PLC (TW.LN) gained
0.9%.
The pound bought $1.2878, not far from $1.2876 late Friday in
New York.
Centering on central banks: Already on the radar is the U.S.
Federal Reserve's central bank symposium in Jackson Hole, Wyo.,
which starts Thursday and runs through Saturday.
Last week, ECB sources in a Reuters report dampened expectations
for a hawkish shift from European Central Bank President Mario
Draghi, saying Draghi will not deliver any new policy messages at
the conference.
"This in itself suggests that the [ECB's] Governing Council
remains to be convinced that it should announce its QE tapering
plans at its next meeting on 7 September," said Investec's chief
economist Phillip Shaw in a note late last week.
"But even without a landmark speech from Mr. Draghi, Fed Chair
Janet Yellen is expected to address the symposium. And of course
the event usually yields general clues to the direction of central
bank thinking," said Shaw.
Read:Euro slides after ECB hints at no hawkish shift at Jackson
Hole
(http://www.marketwatch.com/story/euro-slides-after-ecb-hints-at-no-hawkish-shift-at-jackson-hole-2017-08-16)
(END) Dow Jones Newswires
August 21, 2017 06:17 ET (10:17 GMT)
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