Global stocks higher as investors shrug off Korea tensions
Global stocks recovered their poise Wednesday, a day after concerns over North Korea's latest missile test, which flew over northern Japan, had stoked another bout of risk aversion across financial markets. With geopolitical concerns set aside, investors can now focus on a raft of economic data over the rest of the week.
KEEPING SCORE: In Europe, the FTSE 100 index of leading British shares was up 0.4 percent at 7,365 while Germany's DAX rose 0.5 percent to 12,000. France's CAC 40 was 0.5 percent higher at 11,999. U.S. stocks were poised for a steady opening after turning around Tuesday, with Dow futures and the broader S&P 500 futures up 0.1 percent.
NORTH KOREA: The recovery in stock markets, as well as the modest fall in the value of gold, suggests that investor fears over the developments in North Korea have abated somewhat. The country's leader, Kim Jong Un, has called for more weapons launches targeting the Pacific Ocean to advance his country's ability to contain Guam. U.S. President Donald Trump said North Korea had signaled its "contempt for its neighbors" and that "all options are on the table" in terms of a U.S. response. The U.N. Security Council strongly condemned the launch.
ANALYST TAKE: "Thoughts of nuclear apocalypse appear far from everyone's minds this morning, as markets rebound from yesterday's lows," said Chris Beauchamp, market analyst at IG. "Once again U.S. markets put the bears back in their box, rallying in fine style off the lows."
FOCUS ON DATA: Over the rest of the week, investors can focus on the economic fundamentals, starting Wednesday with the latest update on U.S. growth and the monthly private payrolls report from ADP. The big event though is likely to be Friday's U.S. nonfarm payrolls report for August which could determine the pace of rate hikes from the Federal Reserve this year. On Thursday, there's also crucial inflation data for the 19-country eurozone, which could have an impact on market expectations over next week's policy meeting of the European Central Bank.
ASIA'S DAY: Asian markets finished mostly higher. Japan's Nikkei 225 rose 0.7 percent to 19,506.54 and South Korea's Kospi was up 0.3 percent to 2,372.29. Hong Kong's Hang Seng jumped 1.2 percent to 28,094.61 while Shanghai Composite Index edged down 0.1 percent to 3,363.63. Australia's S&P/ASX 200 was flat at 5,669.70. Stocks were higher in Taiwan and Singapore but lower in Indonesia.
OIL: Benchmark U.S. crude dropped 31 cents to $46.13 per barrel in New York while Brent crude, the international standard, fell 24 cents to $51.42 per barrel in London.
CURRENCIES: The euro, which on Tuesday breached the $1.20 mark for the first time since January 2015, fell 0.3 percent to $1.1937. The dollar rose 0.2 percent to 109.93 yen.