Global stocks tumble on North Korea

LONDON – European shares slipped yesterday after North Korea said it had carried out an underground nuclear test, but losses were limited by energy stocks ticking up as oil rose above US$60 a barrel on the geopolitical concerns.

In company news, MAN rose 2,6 per cent and shares in Scania were suspended after a report in the Financial Times that Germany’s MAN would drop its bid for the Swedish group. By 0745 GMT, the FTSEurofirst 300 index of top European shares was down 0,17 per cent at 1 409,8 points having ended at a five-year closing high on Friday thanks to a wave of takeover news on the back of continued upbeat earnings.”The markets tend not to overreact to geopolitical news but given China’s proximity (to North Korea) people will be anxious to discover what the response from the global community will be,” said Martin Slaney at GFT Global Markets.The narrower DJ Euro Stoxx 50 lost 0,4 per cent and the wider DJ Stoxx 600 fell 0,2 per cent.Among national bourses, Germany’s DAX dipped 0,4 per cent, France’s CAC 40 was down 0,3 per cent but the UK FTSE 100 added 0,16 per cent with heavyweight oil stock BP up one per cent.Japanese financial markets were closed for a public holiday but other Asian asset classes were hit by the North Korean news, and Wall Street’s lower close on Friday after mixed jobs data also contributed to the losses.The Financial Times newspaper said MAN’s decision to drop its Scania bid would enable friendly negotiations on a three-way trucks merger between Scania, MAN and Volkswagen, whose shares were down one per cent.Among other standout movers, Shire Plc jumped almost 10 per cent after its new attention-deficit drug made with New River Pharmaceuticals Inc.was given a conditional approval.UK bank Barclays and Spanish peer BBVA again rose on continued speculation that Citigroup may be eyeing the firms.On the downside, EADS fell a further 1,5 per cent as speculation swirled that Christian Streiff, the head of troubled unit Airbus, was set to resign after just three months at the helm after crippling delays to its A380 superjumbo.UK broadcaster ITV slipped 2,7 per cent after UBS cut its rating to neutral from buy.Asian stocks tumbled realising the region’s worst fears.Dealers said, however, that investors regained some composure in late trade to allow stocks to finish off their early lows as the test sparked concerns over regional security and a likely sharp increase in tensions amid world-wide condemnation.In South Korea, the KOSPI index was down 2,41 per cent after recovering from a near four percent slump.The damage was also likely muted as Tokyo was closed Monday for a public holiday, limiting the immediate impact.The won also fell sharply – from 949 Friday to around 963 against the dollar as investors dumped the local currency in reaction to North Korea’s announcement that the test was carried out.Asian currencies were also generally lower as investors sought out the US$ as a traditional safe-haven, with further turbulence expected as the story unfolds.South Korean financial markets are most at risk, given that technically the country remains at war with North Korea following the 1950-53 war, with Tokyo next in line as most exposed to any shocks.In Hong Kong the benchmark slumped 1,27 per cent, Singapore fell 1,1 per cent and Sydney recovered some ground to close down 0,41 per cent.Losses were relatively modest in Jakarta, Bangkok, Kuala Lumpur, Mumbai and Manila.Nampa-Reuters-AFPBy 0745 GMT, the FTSEurofirst 300 index of top European shares was down 0,17 per cent at 1 409,8 points having ended at a five-year closing high on Friday thanks to a wave of takeover news on the back of continued upbeat earnings.”The markets tend not to overreact to geopolitical news but given China’s proximity (to North Korea) people will be anxious to discover what the response from the global community will be,” said Martin Slaney at GFT Global Markets.The narrower DJ Euro Stoxx 50 lost 0,4 per cent and the wider DJ Stoxx 600 fell 0,2 per cent.Among national bourses, Germany’s DAX dipped 0,4 per cent, France’s CAC 40 was down 0,3 per cent but the UK FTSE 100 added 0,16 per cent with heavyweight oil stock BP up one per cent.Japanese financial markets were closed for a public holiday but other Asian asset classes were hit by the North Korean news, and Wall Street’s lower close on Friday after mixed jobs data also contributed to the losses.The Financial Times newspaper said MAN’s decision to drop its Scania bid would enable friendly negotiations on a three-way trucks merger between Scania, MAN and Volkswagen, whose shares were down one per cent.Among other standout movers, Shire Plc jumped almost 10 per cent after its new attention-deficit drug made with New River Pharmaceuticals Inc.was given a conditional approval.UK bank Barclays and Spanish peer BBVA again rose on continued speculation that Citigroup may be eyeing the firms.On the downside, EADS fell a further 1,5 per cent as speculation swirled that Christian Streiff, the head of troubled unit Airbus, was set to resign after just three months at the helm after crippling delays to its A380 superjumbo.UK broadcaster ITV slipped 2,7 per cent after UBS cut its rating to neutral from buy.Asian stocks tumbled realising the region’s worst fears.Dealers said, however, that investors regained some composure in late trade to allow stocks to finish off their early lows as the test sparked concerns over regional security and a likely sharp increase in tensions amid world-wide condemnation.In South Korea, the KOSPI index was down 2,41 per cent after recovering from a near four percent slump.The damage was also likely muted as Tokyo was closed Monday for a public holiday, limiting the immediate impact.The won also fell sharply – from 949 Friday to around 963 against the dollar as investors dumped the local currency in reaction to North Korea’s announcement that the test was carried out.Asian currencies were also generally lower as investors sought out the US$ as a traditional safe-haven, with further turbulence expected as the story unfolds.South Korean financial markets are most at risk, given that technically the country remains at war with North Korea following the 1950-53 war, with Tokyo next in line as most exposed to any shocks.In Hong Kong the benchmark slumped 1,27 per cent, Singapore fell 1,1 per cent and Sydney recovered some ground to close down 0,41 per cent.Losses were relatively modest in Jakarta, Bangkok, Kuala Lumpur, Mumbai and Manila.Nampa-Reuters-AFP