TSX falls as North Korea tensions spur flight to safety

By Saqib Iqbal Ahmed

North Korea responded with news that it was "examining" a plan to attack the US territory of Guam.

But U.S. stocks regained some lost ground, despite Trump's comments Friday that U.S. weapons are "locked and loaded", ready to respond if North Korea acts "unwisely".

With the rhetoric rumbling on, Europe's top-rated German bond yield held near six-week lows. The Japanese markets were closed for a holiday.

Canada's benchmark stock index fell on Wednesday as heightened tensions between North Korea and the United States drove investors away from higher-risk assets and toward safe havens, such as gold.

Trump's threat earlier this week, to unleash "fire and fury" on Pyongyang if it attacked, was ultimately dismissed as bluster by many investors.

South Korea's fell 1.7 percent to its lowest since May 24, but its losses for the week are a relatively modest 3.2 percent.

The dollar widened losses against the yen to hit a two-month low.

"I'm concerned about our military", Green said.

Valeant's stock, which rallied a day before following quarterly results, sank 9.6 percent to C$17.85 after it said its subsidiaries in Australia were the subject of a tax audit.

The Chinese volatility gauge jumped by the most since January 2016 to its highest level in more than seven months.

Pentagon Ready to 'Fight Tonight' as Tensions Between US, North Korea Escalate
Ellison warned Trump's rhetoric could spur Kim to take action first and called for someone to bring "calm to the situation, not spiking it".

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors there will repatriate funds should a crisis materialise. It was down 0.2% at ¥108.98, after retreating 0.7% on Thursday.

But "the yen may be expected to lose its safe-haven status if US-North Korean tensions continue to escalate", leaving the Swiss Franc, and possibly the US dollar, as the remaining beneficiaries of risk aversion, Emmanuel Ng, currency strategist at OCBC Bank in Singapore, wrote in a note.

The recent resilience of data on the United States economy has not dampened the latest climb, despite depressing prices earlier in the week as reports returned high employment figures ahead of further USA inflation information this week.

The S&P/TSX composite index was down 39.02 points to 15,217.33, with most sectors finishing in the red while bullion stocks surged almost 1.9 per cent.

The bombing of Pearl Harbor, for instance, resulted in a 3.8 percent drop in the S&P 500 on December 7, 1941.

Australian shares were down 1.3%, set for a weekly loss of 0.6%.

"Both (PPI measures) were well below consensus and give us no hope that consumer price inflation is going to materially beat expectations", said Chris Weston, chief market strategist at IG Markets.

The ongoing standoff between North Korea and America has seen gold rise to a two-month high.

Macy's shares closed down 10.2 percent and Kohl's fell nearly 6 percent as the companies continued to report a drop in quarterly same-store sales, stoking concerns that their turnarounds may still be a long way off.

Gold prices, which hit a two-month low on Thursday, were steady at $1,286.31 an ounce, after surging over 2 percent in the past two sessions.

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