FTSE Slips on North Korea Fears

European Shares Plummet

European Shares Plummet

Wall Street declined on Thursday, with the S&P 500 registering its first daily drop of more than 1% in nearly three months, as investors grew cautious over escalating tensions between the United States and North Korea.

The yen held steady against the dollar, taking a breather after having risen on Wednesday to its highest level in almost eight weeks. Traders there were also digesting a rise in jobless claims and the biggest drop in producer prices in 11 months.

Shares of Snap were off about 15 percent premarket following the social media company's earnings that came below estimates and a slew of price target cuts.

"Tensions are high. Markets have taken a little notice", said Greg McKenna, an analyst at AxiTrader.

News Corporation's locally listed shares tumbled 5.6 per cent after filing a full year loss of $817 million in the USA as the traditional newspaper business continued to be a drag on the digital side of the business.

Still, the market has had several fits and starts over the past few months. Is that a reason to be?

A slight rise in a measure of US consumer prices pointed to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year, which would be favourable to equity investors.

While stocks have declined this week, the sell-off has not been dramatic.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalisation drop from a record high US$61.36 trillion on Monday to US$60.43 trillion at the close on Thursday. Some say expectations for its server-chip business were just too high (http://www.marketwatch.com/story/nvidia-stock-could-pause-as-server-growth-slows-down-2017-08-10).

The market also awaited U.S. consumer inflation data on Friday that would offer more clues about the pace of the U.S. Federal Reserve's monetary tightening. Four that are controlled by Dhanin and his family - Charoen Pokphand Foods, CP All, Siam Makro and True Corp. - are ranked by analysts in the region's top 20 in terms of return potential over the next 12 months.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories, leaving prices volatile. "The North Korea situation is still unstable and investors are controlling risk and taking profit after recent gains", said Sam Chi Yung, a Hong Kong-based strategist at South China Financial Holdings.

"For quite some time the market hasn't really reacted to things on the Korean peninsula because we know from the past it is largely North Korean sabre-rattling, and it may yet be". U.S. President Donald Trump said North Korea should be "very, very nervous" if it even thinks about attacking the U.S. or its allies after Pyongyang said it was making plans to fire missiles over Japan to land near the U.S. Pacific territory of Guam.

In Europe, Britain's FTSE100 was down over one percent, Germany's DAX traded 0.5 percent lower, while the French CAC40 index was 0.62 percent in the red, as of 9:00am GMT.

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