Caution rules in markets amid Korea, hurricane worries

AP News
Posted: Sep 06, 2017 7:23 AM
Caution rules in markets amid Korea, hurricane worries

LONDON (AP) — Global stock markets drifted lower Wednesday amid rising risk aversion linked to the ongoing tensions on the Korean Peninsula, while oil prices pushed ahead as Hurricane Irma hit the Caribbean.

KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was down 0.7 percent at 7,324, while France's CAC 40 fell 0.2 percent to 5,076. Germany's DAX was steady at 12,121. U.S. shares were poised for a flat opening, with Dow futures and the broader S&P 500 futures unchanged.

NORTH KOREA: Investors are yet to see signs that the geopolitical tensions between the United States and North Korea, which surged after the North's sixth nuclear test on Sunday, would ease any time soon. On Tuesday, President Donald Trump said in a tweet that he has given the go-ahead for Japan and South Korea to buy a "substantially increased amount" of sophisticated military equipment from the United States. South Korea is seeking more military might and considering bringing back the U.S. nuclear weapons.

ANALYST TAKE: "Global stock markets appear to be in a period of nervous uncertainty, as the threat of another North Korean test looms large over any investors wishing to invest in risky assets," said Joshua Mahony, market analyst at IG.

ASIA'S DAY: Earlier in Asia, most stock markets stuttered with Japan's Nikkei 225 down 0.1 percent at 19,357.97 and South Korea's Kospi 0.3 percent lower at 2,319.82. Hong Kong's Hang Seng index fell 0.5 percent to 27,613.76 and Shanghai Composite Index was flat at 3,385.39. Australia's S&P/ASX 200 fell 0.3 percent to 5,689.70.

HURRICANE: As well as developments surrounding North Korea, investors, particularly in the energy markets, are monitoring the most powerful Atlantic Ocean hurricane in recorded history. Irma made its first landfall in the islands of the northeast Caribbean early Wednesday, roaring along a path pointing to Puerto Rico, the Dominican Republic, Haiti and Cuba before possibly heading for Florida over the weekend.

OIL: Benchmark U.S. crude was up 25 cents, or 0.5 percent, at $48.91 a barrel on the New York Mercantile Exchange, while Brent crude, used to price international oils, gained 69 cents to $54.07 per barrel in London.

CURRENCIES: The euro was up 0.1 percent at $1.1925 while the dollar rose 0.1 percent 108.87 yen.