South Korean shares, which have been among the strongest performers in the world so far this year, fell 1 percent, while the won lost around 0.6 percent to 1,134.70 to the dollar.
A widely followed measure of market anxiety jumped late in the day to close at its highest in almost a month. The gap between the 2-year yield and the 10-year yield narrowed by 2.8 basis points to a spread of 65 basis points, its narrowest since July 24, as longer-dated bonds outperformed. The stock fell $2.04 to $20.99.
USA stocks closed slightly lower Wednesday, making up much of the ground they lost earlier after a rare batch of earnings disappointments by Walt Disney and other big companies.
Mounting tensions between the United States and North Korea battered blue-chip stocks yesterday, knocking the London market's attempts of securing a record high. Trump's comments came after a Washington Post report (https://www.washingtonpost.com/world/national-security/north-korea-now-making-missile-ready-nuclear-weapons-us-analysts-say/2017/08/08/e14b882a-7b6b-11e7-9d08-b79f191668ed_story.html?utm_term=.0938becb046e) that North Korea has built a miniaturized nuclear warhead.
"Trump's response was aggressive and that's why the (stock) market turned lower", said Ken Polcari, director of the NYSE floor division at O'Neil Securities.
"The by-product of quantitative easing, combined with ultra-low interest rate policies, has been the dampening down of volatility", Kelso said, adding that an increase in volatility spikes was likely in the future.
RETAIL SLUMP: Disappointing quarterly results from big department store chains put investors in a selling mood. The stock fell $3.30 to $30.09.
The franc jumped 1.4 percent to 0.9611 francs per euro in early trades. The stock fell 76 cents to $5.48. Worldpay shareholders have been offered 0.55p a share in cash, 0.0672 of a new Vantiv share and a 4.2p dividend.
Trump's remarks on Tuesday that North Korea would face "fire and fury like the world has never seen" weighed on Wall Street and drove up the VIX "fear gauge", or the cost of protection against a drop in the S&P 500. Clothing company Ralph Lauren, with its figures, also brought cheers to investors and increased by more than 13 percent.
Chemicals group Brenntag (BNRGn.DE) also dropped 6.7 percent after second quarter results undershot expectations. Crude oil prices extended their slide as exports from key OPEC producers rose, despite news of lower crude shipments from Saudi Arabia. Brent crude, used to price worldwide oils, added 10 cents to $52.80.
In the macroeconomic area, the United States government reported that the number of vacancies in the USA rose in June to record of nearly 6.2 million.
The dollar inched lower to 109.99 yen on Thursday, holding above Wednesday's low of 109.56 yen, which was the greenback's lowest level since June 15.
Emerging market stocks rose 0.29 percent.
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