WORLD equity markets spiralled lower today on the back of simmering tensions between the United States and North Korea, dealers said.

Traders’ screens were awash with red in Asia and Europe as investors fled to safe haven assets after US President Donald Trump doubled down on his North Korea rhetoric.

“It could be another rough day for European equities,” said ETX Capital analyst Neil Wilson.

“Korean tensions are pretty much the only horse in town.”

Markets reacted with dismay to his fresh warning yesterday that his earlier threat to unleash “fire and fury” on the reclusive nuclear-armed state may not have been “tough enough”.

The reclusive state raised the stakes further yesterday with a detailed plan to send a salvo of missiles towards the US territory of Guam.

“European shares are… continuing their slide on the back of ever more increasing tensions between North Korea and the US,” said analyst Markus Huber at City of London Markets.

“While not necessary unexpected – as the US had to respond to threats made by North Korea that they will fire rockets due to land just off the coast of Guam soon – new comments by Trump propelled stocks lower.”

Wall Street indices suffered their biggest losses in nearly three months yesterday, while the dollar struggled to recover from eight-week yen lows.

With Japanese markets closed for a public holiday, Hong Kong led the downward charge in Asia-Pacific as the Hang Seng lost more than 2%.

The index was also dragged lower after Beijing ordered probes into three major Chinese social networking platforms over outlawed content. 

Shanghai posted its biggest one-day drop since December while Seoul stocks again ended deep in negative territory and the won continued its slide against the dollar. 

Gold, another classic safe haven asset, was trading at around US$1,288 (RM5,540) per ounce, up more than 2% this week and near a nine-week high. 

The greenback also came under pressure after New York Federal Reserve President William Dudley cautioned it would “take some time” for US inflation to reach the bank’s 2% target.

US producer prices disappointed, as traders await consumer price inflation figures later today. 

However, markets remained focused on geopolitical crisis, as angry threats from Washington and Pyongyang stoke fears of a catastrophic miscalculation with global consequences.

Key figures around 1000 GMT

London – FTSE 100: down 1.1% at 7,305.40 points 

Frankfurt – DAX 30: down 0.5% at 11,960

Paris – CAC 40: down 1.2% at 5,054.30

EURO STOXX 50: down 1% at 3,400.99

Tokyo – Nikkei 225: Closed for holiday

Hong Kong – Hang Seng: down 2% at 26,883.51 (close) 

Shanghai – Composite: down 1.6% at 3,208.54 (close) 

New York – Dow: down 0.9% at 21,844.01 (close)

Euro/dollar: down at US$1.1758 from US$1.1772

Pound/dollar: down at US$1.2973 from US$1.2976

Dollar/yen: down at 108.99 yen from 109.20

Oil – West Texas Intermediate: down 37 cents at US$48.22 per barrel 

Oil – Brent North Sea: down 66 cents at US$51.56. – AFP, August 11, 2017.