Markets

Stock markets extend losses at open

Stock markets extend losses at open

In response, President Trump issued a warning to North Korea saying that further threats from the country will be met with fire and fury. Korea's Kospi SEU, -1.10% stock benchmark lost 1.1% while USA stock futures were losing ground ahead of Wednesday's open.

USA stocks closed higher on Friday as Wall Street clawed back from a sharp decline in the previous session but the market still posted a weekly loss on lingering geopolitical uncertainties.

Trump continued the back-and-forth with a post on Twitter this morning indicating that the United States is prepared to take military action against North Korea.

The dollar remained under pressure, although activity was curbed by a market holiday in Tokyo.

Investors bought safe-haven assets such as gold, helping the precious metal touch a two-month high, and the Japanese Yen rose.

The Swiss franc, the other traditional safety-play among currencies, has benefited too.

The euro bought $1.1739, compared with $1.1760 late Wednesday in NY.

Data showed USA producer prices unexpectedly fell in July, recording their biggest drop in almost a year, while another set showed the number of Americans filing for unemployment benefits unexpectedly rose last week.

Still, analysts said the market seemed to be a bit skeptical that the North Korea situation would grow into a major crisis, noting that the losses were still not that deep.

Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a selloff, and the tensions over North Korea proved to be the trigger.

An hour after trading opened this morning, the S&P/NZX50 index was down 79.2 points, or 1 percent, to 7,710.51. The VIX volatility index jumped nearly 11% to 11 on the news. The euro zone's version is at its highest since April, when France's election was rattling the region.

A spokesman for the Korean People's Army said in a statement on Wednesday it was "carefully examining" plans for a missile attack on the U.S. Pacific territory of Guam, which has a large U.S. military base.

Still, it could be healthy for the market to take a breather after all these records.

The euro edged down 0.1 percent to $1.1735.

The Korean won also continued to skid, down 0.45 percent to 1,147.2, falling below its 200-day moving average for the first time in a month.

Investors kept a wary eye on escalating tensions between the USA and North Korea.

After touching a more than two-month high at $1,291.86, spot gold last added 0.2 percent to $1,288.81 an ounce.

Fresenius Medical Care (NASDAQ: NXTM) announced a $2 billion agreement to acquire US medical technology company, NxStage Medical, Inc.

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

ENERGY: Benchmark U.S. crude gained 1 cent to $49.57 a barrel in electronic trading on the New York Mercantile Exchange.

In Paris, Engie fell 1.12 percent on reports that it is in talks to purchase a wind power project in Brazil.