Global Markets may face further turmoil on the back of rising geopolitical tensions between the US and North Korea as the Asian nation continued to be defiant and challenged the US authority. Markets across the globe have been feeling the heat of this conflict and have been shedding gains while watching with baited breath as events unfold. The hope of a peaceful resolution to this conflict is keeping the markets from going into a free-fall.
Earlier today most of the South East Asian markets rose as investors seemed to have moved past the North Korea issue and look for local triggers. Indonesian shares rose as much as 0.9 percent, Singapore shares snapped two sessions of falls to trade slightly higher while Malaysian shares rose for a second straight session.
But as the day progressed, reports of a statement from the North Korean vice-foreign minister Han Song-Ryol to the BBC has stoked the fire which seemed to be dying.
“If the U.S. is reckless enough to use military means, from that very day, there will be all out war. Our nuclear weapons protect us from that threat,” Vice Foreign Minister Han Song-Ryol told the BBC’s John Sudworth. “We’ll be conducting more missile tests on a weekly, monthly and yearly basis,” he threatened. He said that an “all-out war” would result if the US took military action.
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The statement didn’t go down well with the global markets with the European markets shedding points across the board and the dollar dipping against a basket of major currencies.
The pan-European STOXX 600 index, which was on a 16-month high last week, was down 0.6 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.7 percent.
U.S. stock index futures were lower today as investors weighed the brewing geopolitical tensions, quarterly earnings and a possible delay in tax reforms.
As per a Reuters report, at 6:55 A.M. EDT, Dow e-minis were down 27 points, or 0.13 percent, with 27,231 contracts changing hands. S&P 500 e-minis were down 6.75 points, or 0.29 percent, with 149,238 contracts traded. NASDAQ 100 e-minis were down 12.75 points, or 0.24 percent, on volume of 26,730 contracts.