Escalating US-North Korea tensions hit markets

A street sign for Wall Street is seen outside the New York Stock Exchange in Manhattan New York City

US STOCKS-Wall Street swings lower after Trump warns North Korea

Trump continued to ramp up the rhetoric with a post on Twitter this morning indicating that the USA is prepared to take military action against North Korea.

Titled "Reckless game over the Korean Peninsula runs risk of real war", the editorial suggested China will stay neutral if North Korea strikes first, but will intervene if the U.S.is the first mover.

The remarks, following North Korea's earlier revelation of a plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, gave investors a reason to pocket profit in the sectors such as technology that have been the biggest gainers in recent months, analysts said.

Most large-cap stocks were mixed across the board.

Market bellwether Samsung Electronics Co. backtracked 3.49 percent, and No. 2 chipmaker SK hynix Inc. was down 4.04 percent.

About 6.48 billion shares changed hands on USA exchanges on Wednesday compared with the 6.16 billion average for the last 20 sessions. Tokyo's Nikkei 225 tumbled 1.3 percent, while Seoul's Kospi fell 1.1 percent. Brent crude, used to price worldwide oils, gained 10 cents to $52.24 in London.

Oil prices closed lower after an early rally faded. That is significant because yields fall when bond prices rise. "I would expect the markets to react again pretty negatively to any more tough talk from either side, but for now, everybody seems to have settled down, and we'll see what happens".

-All 19 industry groups on the Stoxx 600 fell, with volume about 13 percent higher than the 30-day average at this time of day. Discovery Communications fell 70 cents, or 2.9 percent, to $23.60.

To that end, gold prices shot up to near $1,300 an ounce - their highest level in several months. The stock lost $2.80 to $9.04. The September copper contract was down two cents to US$2.91 a pound.

In other energy futures trading, wholesale gasoline was little changed at $1.62 a gallon, heating oil rose 2 cents to $1.65 a gallon and natural gas rose 6 cents to $2.88 per 1,000 cubic feet. Rival Advanced Micro Devices was also down 2.6 percent.

US crude oil futures settled almost 2 per cent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers.

CURRENCIES: The dollar fell to 109.96 yen from 110.48 yen late Tuesday.

The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.5 percent to C$92.88, and Manulife Financial Corp falling 4.7 per cent to C$24.43, its largest drop since early August previous year.

Sterling was also down 0.1% versus the euro at 1.104.

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