Korea angst shows signs of abating as stocks rise

Sydney - Worry emanating from an escalation of tensions between the US and North Korea showed signs of easing on Monday as shares in Europe followed Asia higher and US stock futures climbed. Gold slipped with Treasuries and the yen.

The Stoxx Europe 600 Index headed for its first gain in four days, tracking advances across markets including South Korea, Australia and Hong Kong amid efforts from US officials to ease fears of imminent war with North Korea. Japanese equities bucked the trend as traders returned after a holiday. Most European government bonds followed Treasuries lower. Bitcoin advanced again.

Volatility gauges had soared last week after markets were jolted by the sudden increase in tensions between the US and North Korea. Just a week ago, global equities reached all-time highs on expectations for a sustained global recovery in the face of tighter US monetary policy.

The latest reading on core prices showed a below-forecast rise, making it tougher for the Federal Reserve to stay on its tightening course.

Meanwhile, there was a mixed bag of data out of Asia on Monday. Japan’s second-quarter growth topped estimates, reflecting better domestic demand. China’s economy posted its worst showing this year as curbs on property, excess borrowing and industrial overcapacity began to have an impact.

Here are the main moves in markets:

Asia

• Japan’s Topix index finished 1.1% lower.

• South Korea’s Kospi index advanced 0.6%.

• Australia’s S&P/ASX 200 Index rose 0.7%.

• In Hong Kong, the Hang Seng Index gained 1.3%, while the Shanghai Composite Index rose 0.9%.

• The Japanese yen sank 0.3% to ¥109.55/$, the first retreat in a week.

Stocks

• The Stoxx Europe 600 Index climbed 0.7% as of 09:15.

• The MSCI All-Country World Index increased 0.2%, the first advance in a week on a closing basis.

• The UK’s FTSE 100 Index climbed 0.3%, the largest increase in more than a week.

• Germany’s DAX Index climbed 0.9%, the biggest increase in more than a week.

• Futures on the S&P 500 Index jumped 0.5%, the largest climb in almost four weeks.

Currencies

• The euro gained less than 0.05% to $1.1825, the strongest in more than a week.

• The Bloomberg Dollar Spot Index rose 0.1%, the largest advance in a week.

• The British pound dipped less than 0.05% to $1.3012.

• The rand climbed 0.8% to R13.3671/$, the first advance in a week.

Bonds

• The yield on 10-year Treasuries increased two basis points to 2.21%.

• Germany’s 10-year yield rose three basis points to 0.41%.

• Britain’s 10-year yield gained two basis points to 1.062%.

Commodities

• Gold decreased 0.2% to $1 286.54 an ounce, the first retreat in a week.

• West Texas Intermediate crude increased 0.1% to $48.86 a barrel.

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