European markets end lower amid geopolitical tensions

Gold spikes as N. Korea ignores Trump's 'fire and fury' warning

Gold spikes as N. Korea ignores Trump's 'fire and fury' warning

MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.6 percent.MIAPJ0000PUS. The Japanese markets were closed for a holiday.

"If the US and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so", the editorial's authors said.

"Of course it's all come at a time when share markets are due for a correction so North Korea has provided a ideal trigger".

The major European markets are also extending a recent move to the downside. "Hopefully Kim Jong Un will find another path!"

Still, the S&P and the Dow were on track to post their biggest weekly loss in about five months and the Nasdaq on course to post its biggest weekly fall in about six weeks.

The Nasdaq Composite Index plunged 2.1% to 6216.87 and the Standard & Poor's 500 Index dropped 1.45% to 2438.21.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalization drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday.

A Chinese state-run newspaper said on Friday that China should make clear that it will stay neutral if North Korea launches an attack that threatens the United States, but that if the U.S. attacks first and tries to overthrow North Korea's government, China will prevent it doing so.

"While the U.S. President insists on ramping up the war of words, there is a decreasing chance of any diplomatic solution", Carnell said.

Traders reacted with dismay to his fresh warning Thursday that his earlier threat to unleash "fire and fury" on the reclusive nuclear-armed state may not have been "tough enough".

The U.S. equity market is hovering near record levels and volume has been tepid following the onset of summer.

The CBOE Volatility Index, the most widely followed barometer of expected near-term US stock market volatility, rose the most in about 12 weeks. It was at its highest level in more than seven months.

At the close trading in NY, the Dow Jones Industrial Average was down 204.69 points, or 0.9%, to 21,844.01, its biggest one-day fall since May 17.

The data comes amid tepid inflation that has remained below the Federal Reserve's 2 percent target, despite low unemployment. Ten-year USA yields dropped 4 basis points to 2.242 percent US10YT=RR and German equivalents fell 3 bps to 0.43 percent DE10YT=TWEB, a six-week low. The USD/JPY pair was trading at 110.072 Yen, up 0.13%.

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis materialize.

The bond market was without direction: the yield of u.s. Treasury bills to 10 years, which evolves to the inverse of the bond price, appears to 2,190 %, compared to 2,198 % Thursday evening, and that bills to 30 years at 2,786 %, compared to 2,773 %.

The dollar index fell 0.32 per cent, with the euro up 0.42 per cent to US$1.1819.

In Europe, the pan-continental STOXX 600 index lost 0.9 percent, with falls deepening after reports a vehicle had rammed a group of soldiers in Paris, injuring six. Economists had expected prices to rise by 0.2 percent.

Away from the geopolitical drama, United States inflation data is due at 1330 GMT.

And in a textbook-type cross-asset move toward safety in times of trouble, the Japanese yen hit an eight-week high against the US dollar while spot gold also reached a two-month high.

Crude futures meanwhile extended losses on fears of slowing demand and lingering concerns over global oversupply.

USA crude was unchanged at $48.59 per barrel and Brent was last at $51.84, down 1.63 percent on the day. It is poised to end the week down 1.7 percent.

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