LONDON MARKETS: FTSE 100 Slips As Renewed U.S.-North Korea Tensions Prompt Caution
August 21 2017 - 11:23AM
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 into
focus.
The FTSE 100 shed 0.1% to close at 7,318.88, falling for a third
straight day.
European
(http://www.marketwatch.com/story/fiat-maersk-shares-shine-in-lackluster-european-stock-market-2017-08-21),
most Asian
(http://www.marketwatch.com/story/australia-japan-lead-asian-market-decliners-2017-08-20)
and U.S
(http://www.marketwatch.com/story/dow-poised-to-slide-again-after-logging-biggest-2-week-fall-in-nearly-a-year-2017-08-21).
stocks started the week in negative territory, as the 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).
North Korea warned on Sunday that the 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.
Those geopolitical tensions are seen as having recently driven
investors to flee so-called risk assets and pick up haven assets
such as gold , bonds and the Swiss franc .
Read:Speculators haven't been this bullish on gold since October
(http://www.marketwatch.com/story/gold-bets-jump-30-among-speculators-as-they-boost-holdings-for-5th-straight-week-2017-08-21)
Miners shine: Mining shares managed to push higher despite the
risk-averse mood. Iron ore heavyweights BHP Billiton PLC (BLT.LN)
(BHP.AU) (BHP.AU) and Rio Tinto PLC (RIO) (RIO) (RIO) ended up by
1.1% and 0.8%, 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
(http://www.marketwatch.com/story/gold-inches-closer-to-1300-as-us-north-korea-tensions-return-2017-08-21).
Stock movers: Shares of Shire PLC (SHPG) (SHPG) slumped 4% after
the drugmaker said Chief Financial Officer Jeff Poulton has decided
to leave the company at the end of the year to join a startup in
the U.S.
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 1.4% and Taylor Wimpey PLC
(TW.LN) gained 1.1%.
The pound bought $1.2903, up from $1.2876 late Friday in New
York.
Centering on central banks: Already on the radar is the Kansas
City Federal Reserve Bank's central bank symposium in Jackson Hole,
Wyo., which starts Thursday and runs through Saturday.
Last week, a Reuters report
(https://www.reuters.com/article/us-ecb-policy-draghi-idUSKCN1AW0LF)
pointed to dampened expectations for a hawkish shift from European
Central Bank President Mario Draghi, saying the ECB chief 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
Chairwoman 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 12:08 ET (16:08 GMT)
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