Published On: Wed, Aug 30th, 2017

Trump's latest response to North Korea sparks FTSE 100 and stock markets to RISE


The FTSE 100 jumped by around 0.4 per cent, with European markets also rising, after the Dow Jones and Wall Street closed up overnoght.

Markets were calmed by the US president’s latest response to the missile launch by North Korea, according to experts.

Mr Trump said the world had “received North Korea’s latest message loud and clear”.

He added: “This regime has signalled its contempt for its neighbours, for all members of the United Nations, and for minimum standards of acceptable international behaviour.

“Threatening and destabilising actions only increase the North Korean regime’s isolation in the region and among all nations of the world.

“All options are on the table.”

Markets were thought to be relieved at the lack of tweets by the US leader and no further escalation of tensions. 

Connor Campbell, financial analyst at Spreadex.com, said: “With little yet to come from North Korea’s latest missile launch – including an unusually restrained comment from Donald Trump – the markets felt free to rebound this Wednesday.
 
“The European indices were fairly uniform in their gains after the bell.

“The FTSE jumped 40 or so points, pushing the index to the upper end of the 7300 to 7400 trading bracket it has found itself in for the last three weeks.”

However, experts warned North Korea could create more market volatility in the coming days and weeks.

Michael Hewson, chief market analyst at CMC Markets UK, added: “It is true that flare ups on the Korean peninsula are nothing new and previous instances have always resulted in a winding back of tension, and it would appear that US investors have decided that recent events are likely to go the same way, as the markets “muscle memory” of selling the panic and then buying the dip kicked in.
 
“In ordinary circumstances this might seem sensible, however the events of the last few weeks can hardly be described as ordinary, which suggests that markets could be being rather naïve that current events can be contained.
 
“Conducting missile tests are one thing but firing a missile over one of your closest neighbours is another, which suggests further twists and turns over the coming days.

“It is also clear that China’s ability to rein in North Korea’s young leader could be reaching its limits, as it warns that relations are now at a “tipping point.”

“These events certainly increase the pressure on China to stop enabling the North Korean regime and to increase the economic pressure that only it can exert on its neighbour.”


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