Gold miners among the few advancers as investors run to safety plays
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 1.3% to 368.04, on course for its lowest close since mid-February, FactSet data showed. 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 1.5% to 11,933.46, on track for its biggest loss since mid-July, but an improvement from a 2% slide during the session.
France’s CAC 40 index was off 0.9% at 5,032.62, but it fell below 5,000 intraday. In London, the FTSE 100 gave up 0.9% at 7,332.91, 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.
Continue Reading Below
“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.
Top gainers on the Stoxx 600 were shares of Randgold Resources Ltd. (RRS.LN) and Fresnillo PLC (FRES.LN) , with respective advances of 4.8% and 3.2%. The precious metals miners were tracking a jump in gold prices to around an 11-month high above $1,300 an ounce.
European stocks did manage to pare losses in afternoon trade, while U.S. stocks (http://www.marketwatch.com/story/how-north-koreas-latest-offensive-harvey-carnage-and-low-volumes-rattle-stock-market-2017-08-29) came off session lows.
“That [U.S. President] Donald Trump’s only comment so far in regards to North Korea has been that ‘all options are on the table’ — a slightly less chest-beating response than perhaps could have been expected — may have gone some way to reassuring U.S. investors,” Spreadex financial analyst Connor Campbell wrote.
In the run to safety assets, the dollar fell to a one-month low against the Swiss franc . The dollar also fell against the euro , sending the shared currency above $1.20 for the first time since January 2015.
Read:Dollar index falls to lowest level since early 2015 after North Korea missile launch (Dollar%20index%20falls%20to%20lowest%20level%20since%20early%202015%20after%20North%20Korea%20missile%20launch)
Harvey lingers: Investors are still 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% on Tuesday, contributing to a nearly 1% 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)
Meanwhile, shares of insurers fell as analysts began calculating the potential damage from Harvey. The Stoxx Europe 600 Insurance Index fell 1.7%, looking at its worst session since November. There, shares of Swiss Re AG (SSREY) slumped 2.2%, and Lloyd’s of London insurers Hiscox Ltd. (HSX.LN) and Beazley PLC (BEZ.LN) declined 2.4% and 3%, respectively.
Insured losses, based on precedent, could come in between $4 billion and $12 billion, excluding personal home flood claims that will be absorbed by the U.S. government’s National Flood Insurance Program, Peel Hunt analyst Andreas van Embden wrote in a Tuesday research note.
(http://www.marketwatch.com/story/why-oil-prices-are-sinking-as-gasoline-soars-after-harvey-2017-08-28)Read: 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 15% 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 10:58 ET (14:58 GMT)