Global stock markets subdued amid Korea jitters
By JOE McDONALD, AP Business Writer
BEIJING (AP) — Stock markets were subdued on Tuesday after South Korean warships carried out military exercises amid tensions over North Korea’s weekend nuclear test explosion.
KEEPING SCORE: Tokyo and Seoul indexes closed lower earlier, but Germany’s DAX was up 0.6 percent to 12,172 and France’s CAC 40 0.1 percent higher at 5,106 after a survey showed the eurozone economy is growing at a robust pace. London’s FTSE 100 was flat at 7,411 after a similar survey of business activity showed a slowdown. On Wall Street, which had been closed on Monday for Labor Day, futures for the Dow Jones industrial average and Standard & Poor’s 500 index were off 0.2 percent.
NORTH KOREA: South Korean warships conducted live-fire exercises at sea following U.S. warnings of a “massive military response” after North Korea’s biggest nuclear test to date. The U.N. Security Council held an emergency meeting and American Ambassador Nikki Haley said North Korean leader Kim Jong Un is “begging for war.”
ANALYST’S TAKE: “The rhetoric on North Korea has stepped up a gear, or maybe two,” Rob Carnell of ING said in a report. “Markets are not as panicky as you might expect against this background, though the direction is as one would expect.” Carnell noted news reports that Japan plans to evacuate its citizens from South Korea if U.S. military action appeared likely. “So packed planes from Seoul heading to Tokyo might be our first clue that a U.S. strike is coming,” he said.
ASIA’S DAY: Tokyo’s Nikkei 225 fell 0.6 percent to close at 19,385.81 and Seoul’s Kospi lost 0.1 percent to 2,326.62. The Shanghai Composite Index rose 0.4 percent to 3,384.32 and Hong Kong’s Hang Seng added 1.1 percent to 27,741.35. India’s Sensex advanced 0.3 percent to 31,807.05 and benchmarks in Taiwan and Southeast Asia also gained. Sydney’s S&P-ASX 200 was unchanged at 5,706.20 while New Zealand declined.
ENERGY: Benchmark U.S. crude gained 62 cents to $47.91 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 6 cents on Monday to close at $47.29. Brent crude, used to price international oils, advanced 24 cents to $52.58 in London. It fell 41 cents the previous session to $52.34.
CURRENCY: The dollar declined to 109.35 yen from Monday’s 109.72 yen. The euro edged down to $1.1893 from $1.1897.