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FTSE sell-off gathers strength on North Korea fears

FTSE sell-off gathers strength on North Korea fears

by Daniel Grote Aug 10, 2017 at 16:42

Update: The FTSE 100 has slumped further into the red amid persisting fears over North Korea tensions, with the sell-off accelerated by a slump in US markets.

The UK blue-chip index closed 113 points, or 1.5%, lower at 7,385, steadily losing ground as the trading session wore on.

Tensions with North Korea appear to have finally shaken the confidence of US investors, after the S&P 500 opened 0.8% lower, threatening to end its 15-day streak of closing moves below 0.3%, a 90-year record.

The stock market jitters came as North Korea outlined plans to launch missiles aimed at the waters off the coast of the US Pacific territory of Guam.

A statement attributed to North Korea's head of strategic forces, General Kim Rak Gyom, said the plan for the strike would be ready by the middle of the month and would await orders from leader Kim Jong-un.

Efforts by the US to dial down rhetoric have failed to shift the bearish mood among investors. Secretary of state Rex Tillerson said yesterday North Korea posed no 'immediate threat' and that 'Americans should sleep well at night, have no concerns about this particular rhetoric of the last few days'.

Tillerson's tone was in sharp contrast to that of US president Donald Trump, who warned on Tuesday any North Korean threat to the US would be met with 'fire and fury'.

'Stock markets in Europe are still under pressure because of the heightened tensions surrounding North Korea,' said David Madden, market analyst at CMC Markets UK.

'Traders are on red alert as the mention of war has sent them running for cover. In a tense situation like this, equity markets can move lower exceptionally fast, and investors don't want to be caught on the wrong side of the markets, so they are getting out now.'

On the FTSE 100, miners were among the biggest fallers. Anglo American (AAL) dropped 2.6% to £12.72 while Rio Tinto (RIO) fell 3.6% to £34.70 and Glencore (GLEN) traded 2.7% lower at 330.5p.

Downbeat housing data meanwhile weighed on builders, with the Royal Institution of Chartered Surveyors reporting house prices grew at their slowest rate in four years in July.

Persimmon (PSN) fell 3% to £24.59, Taylor Wimpey (TW) dropped 3% to 189.1p and Barratt Developments (BDEV) was down 3% at 589p.

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Comments  (9)

  • Jan Bloomberg: 

    I thought BP fell because it went ex-Divi yesterday?

    10:34 on 10 August 2017

  • Daniel Grote - Citywire: 

    Sorry, you're right, that's now been changed.

    10:46 on 10 August 2017

  • Hotrod: 

    I don't think the slight correction in market valuations has anything to do with political tensions around the world.

    You have got to remember that stockmarkets have had a spectacular bull run since the beginning of the year including eight days on the trot in New York.

    Most probably, investors are simply taking profits in the fastest risers in order to buy back in when markets are lower.

    Now-a-days major investment firms use computer generated algorithms to determine the optimum time to sell, It's simply a mathematical exercise.

    Personally I don't feel particularly bearish. In the main people are still spending freely, and new technology is changing the way we do things in so many amazing ways.

    In my opinion the shouting match between Donald Trump and Kim-Jong-Un is much more healthy than the media generated propaganda that we have become accustomed to listening to.

    12:11 on 10 August 2017

  • Franco: 

    The statement from north Korea was from a general, the statement from US was from the president.

    The former said NK will be ready to launch rockets in the sea near Guam, the statement from the president was to launch fire and fury and kill every living thing. The US can obliterate NK in 2 hrs. Stop the propaganda and tell me who is a threat to whom.

    19:44 on 10 August 2017

  • Andrew Stevenson: 

    I lived through the Cuban missile, and it was a lot more exciting than this minor spat. Actually that would have been a brilliant time to invest. The markets collapsed, but you couldn't really have lost. Either everybody got fried, and you wouldn't have needed your money, or the markets recovered and you made a killing.

    20:27 on 10 August 2017

  • Andrew Stevenson: 

    Sorry typo : 'Cuban missile crisis' (definitely senile !)

    20:28 on 10 August 2017

  • an elder one: 

    A couple of fat gits with funny haircuts and huge egos to match, facing off; dodgy!

    Mayhap next we'll see the US anti missile rockets bring down the NK rockets intended for Guam.

    21:15 on 10 August 2017

  • Jezzer: 

    Just make sure you have some cash available if/when the sell-off happens...

    22:15 on 10 August 2017

  • JohnR: 

    Desperate attempt to shift the narrative from the campaign links with the Russians and the ongoing investigation.

    Nothing quite like a war or the threat of one to get the dissenters onside.

    00:14 on 11 August 2017

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