Stock Declines on Fears of War
The Dow is down 1.2% and the FTSE is down 1.75% in trade today. The markets continue to decline due to nervousness in the markets caused by the clash between North and South Korea earlier today and the continued fear of the debt drisis spreading throughout Europe.
US equities followed the European stock market down after South Korea scrambled fighter jets and attacked in response to South Korea’s shelling of Yeonpyeong island.
The debt crisis looming over Europe, concern over Chinese growth and geopolitical unrest in North Korea is denting confidence and is overshadowing the latest economic releases in trade today. Sam Allen one of Torfx’s leading currency analysts has said “Talk of war among traders is bound to trigger a flight to safety and as a result we saw every stock index drop over 1%, gilts and government bonds rose in value and currencies with lower risk profiles rose in value”.
The response to todays events will most likely continue in to trade tomorrow the main effects on the curreny markets are risk aversion. As a result we have seen the USD a safe haven currency gain significantly in trade today.
Tomorrow sees key Q3 GDP data and a host of US data. It is likely that any talks of war will continue to overshadow these releases.
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