Global markets were moving into negative territory on Wednesday because of the rising tensions between the U.S. and North Korea after president Trump's fiery warning to Kim Jong Un.
North Korea will "face fire and fury like the world has never seen”, if it does not stop threatening the United States, said Donald Trump.
The reaction of the financial world was immediate — major European and Asian indexes dropped.
The Stoxx Europe 600 (INDEX: SXEP) went 1% down. German DAX (XETRA: DB1) and French CAC 40 (INDEX: FCHI) dropped 0.7% each and London's FTSE 100 (INDEX: FTMIB) shed 0.5%. The S&P 500 (INDEX: SPX) futures were also opening 0.5% lower.
Japan's Nikkei Stock Average (INDEX: N225) sank 1.3%, South Korea's benchmark Kospi index fell 1.1% and Australia's ASX/S&P 200 (INDEX: AXAT) was off 0.3%.
As a result, seeking for a save haven investors moved their money into gold increasing the price for 0.9%. The Swiss franc also gained against all major currencies.
Tensions will likely remain high in Asia," confirmed Stuart Ive, a senior client manager at OM Financial in New Zealand. "We can expect some defensive trading as investors eye safety.”
"Regional sentiment was dented for sure," agreed Stephen Innes, a senior trader at online broker Oanda. But he added that there were relatively light trading volumes which are typical in August. ”Nothing I would panic too quickly about just yet,” he said.