Published On: Mon, Aug 14th, 2017

Trumps Warning to North Korea caused Global Stocks Plunge


Trumps Warning to North KoreaThe dollar prices and world stock market dropped after Trumps warning to North Korea, Trump said that US would respond with fire and fury to North Korea’s nuclear ambitions. This made the investors to flee to safe-haven investments.

Just hours later North Korea considered missile strikes near US strategic military installations on the Pacific island of Guam.

Trump’s comments proved the intensity of Washington’s pompous attitude towards the nuclear and missile programs of North Korea.

The comments from Trump caused a dip at the Wall Street, breaking its nine-day streak of record.

In a fresher warning to North Korea, Trump took to Twitter and said that US’s nuclear arsenal was more powerful than ever before, this made US stocks fall further.

An analyst at the Charles Schwab brokerage said that US stocks were lower and were instable due to the rising geopolitical tension between US and North Korea. Also, some Chinese inflation reports were a little more than real supporting the conviction.

In Europe, equities dived with London losing 0.6%, while Frankfurt shed 1.1% and Paris fell 1.4%.

The news was also greeted with dismay by traders in Asia, with Tokyo down 1.3%, Hong Kong losing 0.4% and Seoul registering a 1.1% decline.

Investors rejected risky equities and flocked instead to traditional safe-havens like precious metal gold, the Japanese yen and bonds.

In foreign exchange activity, the dollar hit a two-month low at 109.56 yen, while the euro struck a three-week trough against the Japanese unit.

A market analyst David Madden at CMC Markets UK said that the European stocks have suffered greatly as traders prompted to cut-and-run due to the escalating tensions between the US and North Korea.

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- An enthusiast working in Dubai as an Assistant Operations Manager. Writing about Pakistan and the latest happenings, trends around the globe is my passion. A dreamer, learner and a major foodie.