LONDON MARKETS: FTSE 100 Slips After Pyongyang Again Tests Its Nuclear Capabilities

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Asia-focused bank Standard Chartered among the notable decliners

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U.K. stocks slipped Monday, falling alongside markets throughout Europe and Asia after North Korea conducted another test of its nuclear capabilities.

The FTSE 100 index shed 0.1% to 7,428.83, with financial and industrial shares among declining sectors. But gains for basic materials, consumer services and utility shares limited the London's benchmark losses.

The top advancers on the index were Fresnillo PLC (FRES.LN) and Randgold Resources Ltd. (RRS.LN) , rising 2.8% and 2.2%, respectively, as gold prices leapt 1% to $1,343 an ounce. Investors snapped up gold assets after North Korea on Sunday conducted its sixth and most powerful nuclear test (http://www.marketwatch.com/story/we-have-many-military-options-mattis-warns-north-korea-2017-09-03).

"Given the geopolitical circumstance it is hardly surprising that riskier assets such as equity indices are feeling the heat," said Fiona Cincotta, market analyst at City Index, in a note. "Meanwhile flows into safe havens once again increased in what is becoming a regular pattern on a Monday after another weekend of defiance from Pyongyang."

On Monday, media reports from South Korea said Pyonyang appeared to making preparations for the possible launch of another intercontinental ballistic missile (http://www.marketwatch.com/story/north-korea-is-getting-ready-for-another-possible-icbm-launch-says-south-korea-2017-09-04).

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U.S. Defense Secretary James Mattis on Sunday warned North Korea that any attack on the U.S. or its allies would be met with a massive military response (http://www.marketwatch.com/story/we-have-many-military-options-mattis-warns-north-korea-2017-09-03). The U.N. Security Council will hold an emergency meeting on Monday.

Decliners on the FTSE 100 included Asia-focused bank Standard Chartered PLC (STAN.LN) as its shares fell 1.2.%.

"North Korea carried out the nuclear test on Sunday with full knowledge that it would enrage Beijing," said Cincotta, with the test's timing meaning it was threatening to overshadow a summit of the BRICS nations (Brazil, Russia, India, China and South Africa) hosted by China.

The pound bought $1.2947, not far off from late Friday at $1.2952. The fell against major rivals, including the Japanese yen and the Swiss franc , considered haven plays.

A reading on U.K. construction activity in August is due at 9:30 a.m. London time.

(END) Dow Jones Newswires

September 04, 2017 04:16 ET (08:16 GMT)