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Korean shares end lower on foreign selling amid tensions over N. Korea

14 August 2017

Markets overseas were mixed Tuesday.

"Tensions will continue to mount and could eventually develop into a "black swan" event that the markets are not prudently considering", Steve Hanke, professor of Applied Economics at the Johns Hopkins University, told the Reuters Global Markets Forum on Wednesday.

If the North Korean regime "does anything" to the United States or a USA ally "things will happen to them like they never thought possible", Trump told reporters on Thursday, according to Bloomberg.

"We've had some competing forces play out over the past 12 hours - the USA dollar was stronger off economic data, but that was quickly reversed with President Trump's comments about North Korea earlier today (Wednesday)", said ANZ analyst Daniel Hynes.

Trump's threat earlier this week, to unleash "fire and fury" on Pyongyang if it attacked, was ultimately dismissed as bluster by many investors. Pyongyang said it was examining plans for attacking Guam, a US territory in the Pacific that has a USA military base. Inflation has risen 1.7% over the past 12 months, suggesting that inflation pressures remain well under control.

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Macy's dropped 4.2 percent as it reported second-quarter revenues fell 5.4 percent to $5.6 billion, another sign of the travails facing department stores. Silver rose 1.7% to $16.70 per ounce.

Excluding food and energy prices, core consumer prices still crept up by 0.1% in July, matching the increases seen in the three previous months.

Wall Street rebounded on Friday and ended on a good note in a hard week marked by increasing geopolitical tensions: the Dow Jones has taken 0.1% and the Nasdaq up 0.6 per cent.

The Dow slid as declines in shares of Apple and those of Goldman Sachs, recently down 2.3 per cent and 1.7 per cent respectively, outweighed gains in shares of McDonald's and those of Coca-Cola, recently up 1.4 per cent and 0.5 per cent respectively.

The Dow Jones Industrial Average .DJI closed down 204.69 points, or 0.93 per cent, at 21,844.01, the S&P 500 .SPX lost 35.81 points, or 1.45 per cent, to end the session at 2,438.21 and the Nasdaq Composite .IXIC fell 135.46 points, or 2.13 per cent, to 6,216.87.

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Many markets have recently climbed to record or multiyear highs, leaving them vulnerable to a sell-off.

The news was also greeted with dismay by traders in Asia, with Tokyo down 1.3 percent, Hong Kong losing 0.4 percent and Seoul registering a 1.1-percent decline. The Japanese markets were closed for a holiday.

Nick Melhuish, head of global equities at Amundi, said that while equity markets appear rocked by the news today, he did not expect to see any impact on equity markets in the short term. Germany's DAX was flat, while France's CAC 40 fell 1.1 percent.

In currency markets, the Canadian dollar was trading at an average price of 78.71 cents United States, down 0.20 of a USA cent.

At 3:15pm BST, the Comex gold futures contract for December delivery was up 1.09% or $13.90 to $1,293.20 an ounce, as the precious metal extended overnight gains, of almost 2% stateside, with yet another rally in Asia and Europe. The Korean won fell against the US dollar. On the Nasdaq, 1,462 issues rose and 1,227 fell.

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Korean shares end lower on foreign selling amid tensions over N. Korea