Gold miners among the few advancers as investors run to safe haven assets
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Germany's DAX stock index took a bruising as European equities fell to their lowest in more than six months, after North Korea's missile launch over Japan jangled investors' nerves and the euro rose.
The Stoxx Europe 600 index dropped 1.5% to 366.86, on course for its lowest close since early February, FactSet data showed. The pan-European benchmark was also set for its worst percentage drop since late September 2016. No sector rose on Tuesday, and consumer services and telecom shares lost the most ground.
National indexes were sharply lower, with Germany's DAX 30 index down 2% to 11,880.50 and France's CAC 30 index off 1.6% to 4,998.53. In London, the FTSE 100 tumbled 1.5% to 7,294.17, after being closed Monday for a bank holiday.
Missile impact: The selloff came after Pyongyang launched a missile (http://www.marketwatch.com/story/north-koreas-outrageous-missile-launch-over-japan-inflames-tensions-again-2017-08-29) early Tuesday local time that passed over the northern Japanese island of Hokkaido and landed in the Pacific Ocean. The first missile fired over the main part of Japan since 2009 prompted investors to seek relative safety in assets perceived as less risky.
"The main safe-haven trades, such as gold, U.S. Treasurys and the yen have all strengthened, whilst the U.S. dollar and equities have been casualties," said Richard Perry, market analyst at Hantec Markets, in a note.
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Roughly 25 shares on the Stoxx 600 were rising. The top movers were shares of Randgold Resources Ltd. (RRS.LN) and Fresnillo PLC (FRES.LN) , with respective gains of 4.3% and 3.7%. The precious metals miners were tracking a jump in gold prices to around an 11-month high above $1,300 an ounce.
North Korea's action "will surely provoke a response" from U.S. President Trump, who previously suggested the U.S. would react with "fire and fury" at any escalation of threat, said Perry.
"Exactly how Trump responds to this threat could be crucial to the sustainability of key breaks on the likes of gold, which has broken above major resistance at $1,310 this morning," he said.
In the run to safety assets, the dollar fell to a one-month low against the Swiss franc , with the buck buying 94.64 franc. The dollar also fell against the euro , sending the euro above $1.20 for the first time since January 2015.
Harvey lingers: Investors are grappling with the impact of Hurricane Harvey, which slammed into Texas over the weekend, knocking nearly 15% of U.S. oil refinery capacity out of commission (http://www.marketwatch.com/story/houston-flooding-expected-to-have-quite-awful-impact-on-energy-markets-2017-08-27). . The weather system, now downgraded to a tropical storm, is expected to drop up to 20 inches more rain (http://www.marketwatch.com/story/harvey-set-to-pummel-flooded-houston-once-again-2017-08-29) in the already flooded Houston area.
The heavy flooding could hurt even more of the country's energy infrastructure. Royal Dutch Shell PLC (RDSB.LN) (RDSB.LN) said Monday its Deer Park refinery and chemical facility in the Houston area is having problems with a storage tank roof (http://www.marketwatch.com/story/shell-harvey-causing-tank-roof-problems-in-texas-2017-08-29) because of heavy rainfall.
London-listed Shell shares dropped 1.8% on Tuesday, contributing to a nearly 2% fall in the Stoxx Europe 600 Oil & Gas Index .
Read:Why oil prices dropped as gasoline soared after Harvey (http://www.marketwatch.com/story/why-oil-prices-are-sinking-as-gasoline-soars-after-harvey-2017-08-28)
(http://www.marketwatch.com/story/why-oil-prices-are-sinking-as-gasoline-soars-after-harvey-2017-08-28)And see: A look at the insurers most exposed over Harvey (http://www.marketwatch.com/story/as-harvey-swings-back-for-another-pass-at-texas-a-look-at-the-insurers-most-exposed-2017-08-28)
(http://blogs.marketwatch.com/capitolreport/2017/08/25/jackson-hole-fed-conference-live-blog-yellen-draghi-on-tap/)Stock movers: ProSiebenSat.1 Media SE shares (PSM.XE) sank 11% after the German media company reduced its revenue guidance for the third quarter in the German-speaking broadcasting segment (http://www.marketwatch.com/story/prosiebensat1-shares-drop-after-revenue-warning-2017-08-29), though it did confirm its full-year group targets.
Economic data: Consumer confidence in Germany is set to improve further in September, reaching its highest level in almost 16 years (http://www.marketwatch.com/story/german-consumer-sentiment-near-16-year-high-gfk-2017-08-29) at 10.9 points, market research group GfK's monthly survey showed on Tuesday.
French consumer spending rose 0.7% month-on-month and 2.1% year-on-year in July, compared with expectations for gains of 0.4% and 1% in a Wall Street Journal poll of economists. The rebound from a contraction in June (http://www.marketwatch.com/story/french-consumer-spending-rebounds-in-july-2017-08-29-34852518) came as households in the eurozone's second-largest economy spent more on food and manufactured goods, statistics agency Insee said.
A second reading of French gross domestic product in the second quarter found a rise of 0.5% on the prior period, as expected.
U.K. house prices fell 0.1% on the month in August (http://www.marketwatch.com/story/uk-home-prices-reverse-monthly-rise-nationwide-2017-08-29), following a modest increase the previous month, according to Nationwide figures released Tuesday.
(END) Dow Jones Newswires
August 29, 2017 05:42 ET (09:42 GMT)