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Asia Pacific Market: Korean tensions likely continue selloff

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Pacific share market expected to commence trading with a back-foot note on Friday, 11 August 2017, due to ramping up of tensions between the US and North Korea after President Donald Trump doubled down on his warnings to North Korea over its nuclear programme.

Overnight, closed sharply lower after Trump, with fiery rhetoric, warned Pyongyang against attacking Guam or US allies after it disclosed plans to fire missiles over to land near the U. S. Pacific territory. Trump took specific aim at North Korean leader Kim Jong Un, saying, he had "disrespected our country greatly," and would not be "getting away with it."

The Dow Jones Industrial Average fell 0.9% to end at 21,844.01, the only close below 22,000 since breaking through that level for the first time August 2. The broad-based S&P 500 was hit even harder, dropping 1.5% to close at 2,438.22, while the tech-rich Nasdaq Composite Index lost 2.2% 6,216.87.

The MSCI World index dropped 1.1% overnight in its third straight day of declines and its biggest one-day slide since May 17, as US President Donald Trump stepped up his rhetoric against North Korea.

In commodities, Crude failed to hold the 50 per barrel level, falling nearly 2% topping at $50.22 earlier in the session.

Gains came following an OPEC report, which upped its demand forecast for its oil in 2018 by over 200k barrels per day to 32.42 million barrels per day. At the same time, the cartel revealed that its July production was 32.87 million barrels per day, above its increased 2018 demand prediction.

Libya, Nigeria, and Saudi Arabia were the main drivers behind the OPEC production increase, with Libya raising its output by 154,300 bpd - by far the biggest increase among the cartel's members. Nigerian oil production rose by 34,300 bpd to 1.748 million bpd, while Saudi Arabia's went up by 31,800 bpd to 10.067 million bpd. On the other hand, OPEC reported, based on secondary sources, Iraqi oil output fell by 33,100 bpd ion July, the biggest decline among OPEC members. The second-largest decline came from Angola, whose production fell by 19,300 bpd, and Venezuela's output dropped by 15,800 bpd.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, August 11 2017. 08:01 IST