Asia stocks snap back into the red on lingering North Korea tensions

Donald Trump's 'fire and fury' warning sends stock markets lower, but lifts gold

Donald Trump's 'fire and fury' warning sends stock markets lower, but lifts gold

Retail continues to get battered, as shares of JC Penny fell to an all-time low.

Defence Secretary Jim Mattis warned on Monday that the USA military would be prepared to intercept a missile fired by North Korea if it was headed to Guam.

"The typical text book trade is that investors rush for safe havens".

USA stock benchmarks rallied on Monday, as a recent aversion to assets considered risky on the back of fears about tensions between the US and North Korea receded somewhat.

Just a week ago, global equities reached all-time highs on expectations for a sustained global recovery in the face of tighter United States monetary policy.

American and South Korean officials said they would move forward with large-scale military exercises later this month, which North Korea claims are a rehearsal for war.

In Europe, the pan-continental STOXX 600 index lost 0.8 per cent, with falls deepening after reports a auto had rammed a group of soldiers in Paris, injuring six.

The sell-off is likely to extend into the European session, with financial spreadbetter CMC Markets expecting Germany's DAX and France's CAC 40 to open down about 0.7 percent each and Britain's FTSE 100 to start 0.55 percent lower.

For now, the dollar remained on the back foot, pulling back 0.1 percent to 0.9635 Swiss francs on Friday, after dropping as much as 1.2 percent to a two-week low overnight.

Tom Cruise injured on MI6 set
He said: "What Cruise is doing in this movie I believe will top anything that's come before". He managed to get himself onto the building but then limps away.

MSCI's main index of Asia-Pacific shares, excluding Japan, was last down 0.6pc.

The latter continued to be dragged down by a stronger euro and Japanese yen, while the former were shedding some of the impressive safe-haven demand that accumulated this week.

The Swiss franc reversed a two-week losing streak and was also on track for its biggest daily gain against the euro since the Swiss National Bank removed its cap on the currency in January 2015.

The International Energy Agency said Opec members were not complying with production cuts, which were holding back efforts to rebalance the market quickly.

On the currency markets, sterling rose 0.2% to flit around the 1.30 USA dollar mark, with the greenback falling in response to the latest USA inflation data. Spot gold XAU= was down 0.6 percent at $1,274.19 per ounce.

Yields on core government debt fell.

Benchmark 10-year notes last fell 10/32 in price to yield 2.222 percent, from 2.187 percent late on Friday.

Among other metals, silver edged down one per cent to US$16.85 per ounce.

"It seems like tensions may have de-escalated between North Korea and the United States that had been weighing on the markets last week", said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

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