WORLD stock markets and the dollar slid today after US President Donald Trump warned of “fire and fury” in retaliation to North Korea’s nuclear ambitions, sending traders fleeing to safe-haven investments.

North Korea raised the stakes just hours later, saying it was considering missile strikes near US strategic military installations on the Pacific island of Guam.

Trump’s comments marked a sharp intensification of Washington’s rhetoric over the North’s nuclear and missile programmes, which saw a seventh set of United Nations sanctions imposed on it at the weekend.

“North Korea best not make any more threats to the United States,” said Trump, speaking from his golf club in New Jersey yesterday.

“They will be met with fire and fury like the world has never seen.”

The comments dragged Wall Street down into negative territory in late trading, snapping a nine-day streak of record closes by the Dow.

US stocks fell further at the opening bell today, with the Dow sliding 0.3%.

“US stocks are lower in early action, with sentiment getting uneasy as geopolitical tensions ramped up yesterday between the US and North Korea, while some cooler-than-expected Chinese inflation reports are doing little to support conviction,” said analysts at the Charles Schwab brokerage.

In Europe, equities dived with London losing 0.7% , while Frankfurt shed 1.3% and Paris fell 1.6%.

The news was also greeted with dismay by traders in Asia, with Tokyo down 1.3%, Hong Kong losing 0.4% and Seoul registering a 1.1% decline.

Investors shunned risky equities and flocked instead to traditional safe-havens like precious metal gold, the Japanese yen, and bonds.

In foreign exchange activity, the dollar hit a two-month low at 109.56 yen, while the euro struck a three-week trough against the Japanese unit.

Key figures around 1330 GMT

London – FTSE 100: down 0.7% at 7,486.62 points

Frankfurt – DAX 30: down 1.3% at 12,131.20

Paris – CAC 40: down 1.6% at 5,136.61

New York – Dow: down 0.3% at 22,023.30

Tokyo – Nikkei 225: down 1.3% at 19,738.71 (close)

Hong Kong – Hang Seng: down 0.4% at 27,757.09 (close)

Shanghai – Composite: down 0.2% at 3,275.57 (close) 

Euro/dollar: down at US$1.1709 from US$1.1754 at 2100 GMT yesterday

Pound/dollar: down at US$1.2978 from US$1.2994

Dollar/yen: down at 109.80 yen from 110.35 yen 

Oil – Brent North Sea: up 34 cents at US$52.48 per barrel. – AFP, August 9, 2017.