Markets react after the North Korean nuclear test over the weekend raises fears of regional instability.
TOKYO — Global stocks mostly fell Monday after a nuclear test by North Korea over the weekend raised fears about regional instability and as trading volumes remained thin because of the U. S. holiday.
France’s CAC 40 slipped 0.3 percent to 5,110.29 and Germany’s DAX lost 0.2 percent to 12,119.21. Britain’s FTSE 100 edged down 0.3 percent to 7,415. U. S. markets were closed for Labor Day.
North Korea said it successfully tested a hydrogen bomb. Defense Secretary Jim Mattis responded by saying that the U. S. will answer any threat from the North with a “massive military response – a response both effective and overwhelming.” President Trump threatened to halt all trade with countries doing business with North Korea, a warning to China, and faulted South Korea for its “talk of appeasement.”
“Korean tensions are elevated again, ” said Chang Wei Liang from the Singapore Treasury Division at Mizuho Bank. “While U. S. Defense Secretary Mattis warned of a ‘massive military response’ if the U. S. or its allies are threatened, risk-off sentiment this morning is not unduly excessive, largely because markets still do not expect any military escalation in the near-term.”
Japan’s benchmark Nikkei 225 edged down 0.9 percent to finish at 19,508.25, while Australia’s S&P/ASX 200 lost 0.4 percent to 5,702.00. South Korea’s Kospi dipped 1.2 percent to 2,329.65. Hong Kong’s Hang Seng slipped 0.9 percent to 27,703.67, but the Shanghai Composite rose 0.4 percent to 3,379.58.
Benchmark U. S. crude gained 34 cents to $47.64 a barrel. It added 6 cents to $47.29 a barrel in New York late Friday. Brent crude, which is used to price international oils, rose 1 cent to $52.76 a barrel in London.
The dollar fell to 109.58 yen from 110.04 yen late Friday. The euro slipped to $1.1905 from $1.1907.
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