Markets extend losses as Korea tensions escalate

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Humphrey said the escalating crisis with North Korea forces Congress to act. Thursday's producer-price index came out tepid, analysts said. Core prices had been expected to rise by 0.2%.

Retailers Wal-Mart (WMT), Home Depot (HD), Target (TGT), Staples (SPLS), and Gap (GPS) are also among the companies due to report their quarterly results next week.

Retailers were all under pressure after Macy's and Kohl's each reported lower second-quarter sales, reviving worries about consumer discretionary stocks. That marks its eighth quarter of better-than-expected earnings in a row.

European markets were also in the red following a negative session in Asia.

Meanwhile, gold stocks bucked the downtrend, driving the NYSE Arca Gold Bugs Index up by 1.3%. "We believe continued saber-rattling ... could take gold prices higher still", Nitesh Shah, director at ETF Securities, told Reuters.

Crude oil futures are slipping USD0.10 to USD48.49 a barrel after tumbling USD0.97 to USD48.59 a barrel on Thursday.

The pound was quoted at USD1.3002 at the London equities close Wednesday, compared to USD1.2965 at the same time on Tuesday.

United Kingdom stocks headed sharply lower again on Friday, as the escalating tensions between the US and North Korea rattled investors and helped drive a global selloff. The Japanese markets were closed for a holiday.

The US dollar set an eight-week low against the yen after US President Donald Trump further ratcheted up the rhetoric, suggesting that his "fire and fury" comments may not have been tough enough.

The Japanese yen hit an eight-week high against the US dollar, while spot gold also reached a two-month high.

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After touching a more than two-month high at US$1,291.86, spot gold last added 0.2 per cent to US$1,288.81 an ounce. Hong Kong's Hang Seng Index slipped 0.47% while mainland markets traded marginally higher.

Australian shares fell to near three-week lows in a broad-based selloff.

Raytheon, which manufactures Tomahawk cruise missiles jumped +2.57% while other defense contractors such as Lockheed Martin (+1.71%), Northrop Grumman (+1.22%) and L3 Tech (+1.99%) also saw gains.

"Geopolitical tensions are the main focus: the S&P 500 was down 1.5 per cent last night and many investors are becoming risk averse", said DZ Bank strategist Andy Cossor.

The biggest fallers were Standard Life down 16p to 410.8p, Rio Tinto down 109.5p to 3,370p, Old Mutual down 6.2p to 195.3p, Anglo American down 39p to 1,238.5p.

Priceline Group slumped 6.5 percent after issuing a profit forecast that was weaker than analysts were expecting.

Defensive assets drew support from fresh tensions surrounding North Korea after reports that the Pyongyang regime had developed a miniaturised nuclear warhead which could be deployed on a long-range missile. At this level, the benchmark is on track for its lowest close since late June, according to FactSet data.

In the first four days of the week, the Standard & Poor's 500 index swung from marking its latest record high to posting its biggest single-day drop in almost three months. "We're not very oversold yet so the market still has more downside left to it".

Despite the past week's decline, the major indexes are in positive territory so far this year, led by the Nasdaq, which is up 16.2 percent.

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