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US stocks slip amid heightened US-North Korea tensions

12 Août 2017

The latest sell-off was the most severe yet, amounting to the biggest single-day drop for the stock market in almost three months.

The dollar index, which tracks the greenback against six rival currencies, was up 0.07 percent to 93.717, after rising as high as 93.888 earlier in the session.

On Thursday, the three major US indexes logged their worst performances since mid-May (http://www.marketwatch.com/story/US-stocks-set-up-for-another-day-of-losses-as-north-korean-tensions-simmer-2017-08-10) in a session dogged by geopolitical concerns.

President Trump said North Korean dictator Kim Jong-un has been "very threatening, beyond a normal state". The Nasdaq composite fell 45 points, or 0.7 per cent, to 6,324.

"I think this situation is more critical that the market is respecting". "So why buy risk assets (such as equities or credit) when the thematic at hand isn't going to resolve itself in the immediate short-term?" The stock came in under pressure after a decline in the number of visitors during the first half of this year and a reduction in earnings forecast for the whole year.

The back-and-forth came on the heels of reports the US intelligence community has determined North Korea has successfully produced a miniaturized nuclear warhead that can fit inside its missiles.

But if North Korea were to launch missiles toward Guam or Hawaii "that would certainly be more of an escalation" that could potentially roil markets more.

Even after their recent losses, USA stocks remain near their all-time highs.

The benchmark BSE index closed down by 317.74 points or 1.01 per cent at 31,213.59, its lowest close in over a month.The broader NSE index ended lower by 109.45 points or 1.11 per cent at 9,710.80.

US stocks opened higher on Friday after suffering their worst single-day losses since mid-May on Thursday.

A slump in oil prices, including a 1.5 per cent fall in Brent Crude, hit the major energy producers. On a month-on-month basis, the PPI rose +0.2% last month, after three months in the red.

What's your investment strategy amid U.S. "A lot of it (the rally) is due to the risk premium", said Gan. Eastern Time, alongside core CPI.

Disappointing US inflation and jobs data have not helped the dollar.

Down-under, RBA Assistant Governor Kent reiterated that a further rise in AUD (A$0.7888) would result in slightly lower domestic growth - AUD currency appreciation has been more about "dollar weakness and not linked to commodity prices".

Stocks fluctuated over the course of the trading session on Tuesday before eventually closing modestly lower.

Nvidia Corp.(NVDA) shares fell 6.6%, even after the chip maker posted upbeat earnings late Thursday.

The VIX, or volatility index widely used as a proxy to gauge market fear, soared by 44 percent to its highest level since Trump was elected.

Markets had earlier stabilised as U.S. secretary of state Rex Tillerson tried to ease the tensions, saying he did not believe there is "any imminent threat" to Guam and that diplomacy would prevail.

"The overnight price action provides a good guide for a likely trading pattern in the case of further escalation - being long an equally-weighted basket of yen and franc vs short won should do well under such circumstances", said Chris Turner, head of foreign exchange strategy at ING.

US stocks slip amid heightened US-North Korea tensions