Global Market Report - August 29 2017

North Korea's latest military aggression provided global investors with a strong trigger to offload equities

James Gard 29 August, 2017 | 10:49AM
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Asia

After a few weeks of relative calm in Asian markets, news that North Korea had fired a missile over Japan revived fears of nuclear conflict. Japan’s Nikkei fell sharply in morning trading, but recovered some ground to close around 0.5% lower at 19,362.55 points. Markets in mainland China, South Korea, Hong Kong, India and Australia were all down on the day. Japan’s prime minister Shinzo Abe warned of the “unprecedented, serious and grave threat seriously damages peace and security in the region” from North Korea.

Europe

Stock markets in Europe took their cue from Asia-Pacific’s uneasiness over the latest escalation in regional tension – with the FTSE 100 index falling nearly 1.5% or 107 points to 7294 points after the stock resumed trading after the long weekend. This brings the blue-chip index down to levels last seen in May. Nevertheless, the index’s biggest risers on Tuesday morning were gold-miner Randgold Resources (RRS), up 4%, and silver miner Fresnillo (FRES), which rose by over 3% in morning trading.

Germany’s Dax was off nearly 2% at 11,904 points, revisiting March levels. France’s Cac was 80 points lower, pushing the index below 5,000 points – as the country’s GDP for the second quarter came in 0.5% higher quarter on quarter and 1.7% year on year. The year on year increase was below forecasts and the outturn in the previous quarter.

North America

US stock market futures also reflect the retreat from risk seen throughout the world so far. The Dow Jones Industrial Average is predicted to fall 100 points at the open, with the S&P 500 expected to shed 20 points. Gold prices spiked above $1,300, a near-year high for the safe haven asset. Looking ahead, US consumer confidence is due for August as well as Case-Shiller house price data for June. In US earnings, electronics-focused retailer Best Buy (BBY) is expected to post revenues of $8.4bn for the second quarter. In Canada, the bank reporting season continues with earnings from Bank of Nova Scotia (BNS) and Bank of Montreal (BMO).

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Bank of Montreal132.24 CAD0.58Rating
Bank of Nova Scotia78.50 CAD-0.27Rating
Best Buy Co Inc86.51 USD-0.30Rating
Fresnillo PLC647.50 GBX-1.07

About Author

James Gard

James Gard  is senior editor for Morningstar.co.uk

 

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