Equities fall on rising tension between US & North Korea

Traders work on the floor of the New York Stock Exchange

Daily Briefing: Trump warning over North Korea hits markets

"European shares are trading once again lower. continuing their slide on the back of ever more increasing tensions between North Korea and the USA", added analyst Markus Huber at City of London Markets.

US President Donald Trump issued a new threat to North Korea, saying American weapons were "locked and loaded" as Pyongyang accused him of driving the Korean Peninsula to the brink of nuclear war.

In Frankfurt, the Dax was flat, but the Cac 40 in Paris fell 1.1 per cent.

South Korea's KOSPI fell 1.7 per cent on Friday to its lowest since May 24, but its losses for the week were a relatively modest 3.2 per cent.

"If the US and South Korea carry out strikes and try to overthrow the North Korean regime and change the political pattern of the Korean Peninsula, China will prevent them from doing so", the editorial's authors said. "You're less than 2 per cent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

Gold, another classic safe haven asset, was trading at around $1,285 per ounce, up more than two percent this week and near a nine-week high.

The yen has also registered its biggest weekly gain since May against the dollar amid speculation that investors of Japan, as the biggest creditor nation, would repatriate their funds should a war break out.

Elsewhere, the New Zealand dollar NZD=D3 slid 0.9 percent to $0.7273. MSCI's broadest index of Asia-Pacific shares outside Japan .miapj0000pus closed 1.37 percent lower. But for the week the S&P 500 lost 1.3 percent, its worst weekly showing since March.

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"When investors are optimistic to the extreme, it means that most of their money is already in the market and there's no more money coming in", Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Florida.

Hong Kong shed more than one percent and Shanghai also closed lower, while Seoul shares continued their sell-off after slumping Wednesday, with the won again softening.

The dollar index slipped to a one-week low on Friday after the USA data.

Market participants are also nervous about escalating tensions between the US and North Korea.

"But now we're seeing increasing rather than diminishing tensions", he said.

For the week, the Dow is on track for a decline of 0.9%, its biggest one-week drop since April. To Reuters citing Peter Kenny, in charge of the market strategy in Global Markets Advisory Group, " market participants are looking for any reason for a reset of course. The 30-year bond was last up 4/32 in price to yield 2.7871 per cent, from 2.794 per cent late on Thursday.

Elsewhere in commodities, the September crude contract advanced 20 cents to $49.76 per barrel and the September natural gas contract was up seven cents to $2.95 per mmBTU.

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