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Nuclear Nerves  Wipe $1t  Off Stocks
Nuclear Nerves  Wipe $1t  Off Stocks

Nuclear Nerves Wipe $1t Off Stocks

Nuclear Nerves Wipe $1t Off Stocks

The damage inflicted on world stocks this week by the escalating war of words over North Korea topped $1 trillion on Friday, as investors again took cover in the yen, the Swiss franc, gold and government bonds.
With the tense mood pushing European shares down for a third day and Wall Street set to fall again, the stocks were on course for their worst week since Donald Trump won November's US presidential election, Reuters reported. Now installed in the White House, Trump issued a new warning to Pyongyang on Friday, tweeting: "Military solutions are now fully in place, locked and loaded, should North Korea act unwisely."
Japanese markets were closed for a holiday but the yen powered on, hitting an eight-week high of 108.91 yen to the dollar, adding to its biggest weekly gain since May. The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialize.
The Swiss franc, the other traditional safety-play among currencies, has benefited too. Two weeks ago it saw its biggest weakly fall against the euro since the start of 2015. This week has seen its biggest rise since June 2016.
And in bond markets, 10-year US Treasuries and Germany's ultra-safe government bonds, known as Bunds, were trading at their highest prices since June.
Many world stock markets have hit record or multi-year highs in recent weeks, leaving them vulnerable to a sell-off, and the tensions over North Korea have proved the trigger.
The Chinese volatility gauge jumped by the most since January 2016, to its highest level in more than seven months. The eurozone's version is at its highest since April, when France's election was rattling the region.
Overnight, MSCI's broadest index of Asia-Pacific shares outside Japan had skidded 1.55%, its biggest one-day loss since mid-December, to leave it down 2.5% for the week.

 

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