Markets around Europe are sliding in reaction to North Korea's latest missile launch
North Korean leader Kim Jong Un during the 2016 Workers' Party Congress in Pyongyang in a handout photo provided by Korean Central News Agency. KCNA/via REUTERS
LONDON — Stocks around Europe, and in the broader global markets, were falling Tuesday as investors reacted to the latest provocation from North Korea.
North Korea launched a missile that flew over the northern Japanese island of Hokkaido at 5:58 a.m. local time on Tuesday, according to Japanese government officials.
Japan's NHK News reported that the missile passed over Japan, with people in northern Japan warned to take precautions.
The move was the latest in a series of missile launches and grandstanding statements from the far-east state in recent months, as tensions rise between its ruler Kim Jong Un and the West.
As noted by analysts from Nomura in a note circulated early Tuesday morning, the "number of North Korean provocations this year has already exceeded last year's figure" and is the highest of any year in the past two decades.
Earlier in August, US President Donald Trump warned that any provocations from the country would "be met with fire and fury like the world has never seen."
European markets are dipping amid the latest development in the tensions, with virtually all of the continent's major bourses losing in excess of 1% during the morning's trading.
In Britain, the FTSE 100 — which returns to trading Tuesday after a long bank holiday weekend — dropped 1.2% to trade at 7,31 points as of 11.30 a.m. BST (6.30 a.m. ET). Losses across the index are widespread, with just a handful of companies, including the gold miners Fresnillo and Randgold Resources, gaining ground.
The story across the continent was largely the same, with indexes across the channel also down more than 1%, as the table below illustrates:
Investing.com
"Risk-sensitive stocks have fallen sharply while perceived safe-haven gold, Japanese yen and Swiss franc have soared higher," Fawad Razaqzada, a market analyst at Forex.com, wrote in an email. "Sentiment has been hit above all by raised geopolitical concerns after North Korea fired what is thought to be a ballistic weapon over northern Japan in the early hours of Tuesday."
"However investors may have overreacted," he added. "Tensions may calm down quickly if North Korea explains its decision to launch the missile over Japan and says it was a one off, for example."
US stock futures slumped overnight after the missile launch was reported, while Asian equities also dropped sharply. Futures point to a drop of about 0.7% in the S&P 500 when markets open.
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