Asian markets suffer bloodbath over escalating US, North Korea tensions

Persistent gold buying by local jewellers at domestic spot market stoked uptrend

US President Donald Trump's warning to North Korea has given gold momentum; investors are also awaiting US inflation data.

"The people of this country should be very comfortable, and I will tell you this: If North Korea does anything in terms of even thinking about attack, of anybody that we love or we represent or our allies or us, they can be very, very nervous", Trump said.

On Thursday, the CBOE Volatility Index, a barometer of expected near-term stock market volatility, closed at its highest since the USA presidential election.

Rising tensions between North Korea and the United States were once again the theme of the day with only the release of much-awaited inflation figures out of the U.S. managing to divert attention away from developments on that front. Earlier in Asia, Japan's benchmark Nikkei 225 slipped less than 0.1 percent, while Hong Kong's Hang Seng slid 1.1 percent.

"Of course it's all come at a time when share markets are due for a correction so North Korea has provided a ideal trigger".

USA crude was unchanged at $48.59 per barrel and Brent was last at $51.84, down 1.63 percent on the day.

The Standard & Poor's 500 index fell 24 points, or 1 percent, to 2,449 as of 2:16 p.m.

North Korea had announced a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers.

Singapore banks led the decline, with DBS Group shedding 2.2 per cent or 46 cents to $20.80; OCBC Bank fell 12 cents or 1.1 per cent to $11.20; United Overseas Bank Group lost 1.3 per cent or 33 cents to $24.20.

The negative headlines provided many investors with an opportunity to pocket some of their recent gains following a string of record highs fueled by strong corporate earnings. Small-company stocks fell more than the rest of the market.

"It's been a bit of a roller coaster this week, with all the rhetoric between the U.S. and North Korea", said Jeff Kravetz, regional investment strategist at U.S. Bank Wealth Management.

Shares of U.S. department stores Kohl's and Macy's were weak after their results.

Against the euro, the dollar is valued at $1.826 compared to yesterday's $1.1772.

US stocks closed lower on Tuesday after Trump's vow to respond aggressively to any North Korean threats triggered a late afternoon selling spree.

The 30-year bond last rose 28/32 in price to yield 2.7759 percent, from 2.818 percent late on Wednesday.

While North Korea is likely to remain in focus, a report on consumer price inflation may also attract attention on Friday, with consumer prices expected to rise by 0.2% in July.

Gold, a classic safe haven asset, was trading at around $1,292 per ounce, up more than two percent this week and near a nine-week high.

In a note sent to clients late on Thursday, the USA bank predicted the single currency would rise to $1.25 in the first quarter of next year and reach parity with sterling for the first time. Humana rose $4.74, or 1.9 percent, to $254.96.

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