Monday September 4th

4-09-2017

European markets lower after North Korea nuclear test

European markets were trading in the red on Monday, as North Korea's latest nuclear test prompted investors to rush to safe-haven assets. Safe haven demand drove up gold and the yen while equities in Asia closed down after after North Korea said it tested a hydrogen bomb over the weekend. Stocks were further pressured on Monday headlines that the North was planning future missile launches. The Kospi fell 1.19 percent, or 28.04 points, to end at 2,329.65. Japan's Nikkei 225 declined 0.93 percent, or 183.22 points, to close at 19,508.25. Markets could be set for further downside when U.S. markets resume trade after Monday's Labor Day holiday, Reuters reported. Greater China stocks were mixed, with mainland markets shrugging off geopolitical tensions in the region. Hong Kong's Hang Seng Index slipped 0.9 percent by 3:00 p.m. HK/SIN. On the mainland, the Shanghai Composite rose 0.38 percent, or 12.7170 points, to close at 3,379.8364 and the Shenzhen Composite climbed 0.602 percent, or 11.7694 points, to close at 1,968.1219. Benchmark global oil prices fell on Monday after a powerful North Korean nuclear test triggered a shift away from crude markets to assets perceived to be safer, such as gold. Brent crude futures, the international benchmark for oil prices, were down 68 cents, or 1.3 percent, at $52.07 a barrel by 0808 GMT. U.S. West Texas Intermediate (WTI) crude futures were more stable, down 8 cents at $47.21 barrel, as several refineries in the U.S. Gulf Coast restarted 10 days after Hurricane Harvey struck the region, boosting the outlook for demand in the world's top oil consumer. Gold prices shot up on Monday to their highest in nearly a year as investors bought safe haven assets amid worries that North Korea might launch more missiles in the wake of its sixth and largest nuclear test. A weaker dollar also underpinned gold, which was likely to continue to rally in coming days, according to Tom Kendall, head of precious metals strategy at ICBC Standard Bank. "We've got the geopolitics and we've also got a fairly benign interest rate environment. There's still nothing threatening coming out of the Fed recently," he said. Spot gold was up 0.9 percent at $1,336 per ounce by 0915 GMT, after earlier touching its strongest level since late September last year at $1,339.47. U.S. gold futures for December delivery were up 0.8 percent at $1,341.30 an ounce.