Stock markets in Europe and the US mostly recovered yesterday, although the North Korean crisis remained on the minds of investors.
Gold hit near one-year highs as investors continued to flock to haven assets ahead of the European Central Bank’s regular policy meeting today.
There was little movement between the dollar, euro and pound yesterday, noted analyst Connor Campbell at Spreadex.
“That’ll be in part due to the fact that the week’s main forex-event – today’s ECB meeting – is yet to come, investors having little reason to change their positions until after (ECB chief Mario) Draghi’s latest comments,” he said.
John Cryan, head of Germany’s biggest lender Deutsche Bank, urged the ECB to end its easy-money policy to avoid inflating market bubbles and relieve struggling eurozone lenders.
For now, though, the focus remained firmly on North Korea.
“Global stock markets appear to be in a period of nervous uncertainty, as the threat of another North Korean test looms large over any investors wishing to invest in risky assets,” said Joshua Mahony, market analyst at IG trading group.
After a soft start due to a poor handover from Asia, European stocks perked up in afternoon trading.
“Stocks in Europe are a mixed bag this afternoon as the stalemate regarding North Korea is still ongoing,” said market analyst David Madden at CMC markets UK.
Frankfurt finished the day up 0.8% at 12,214.54, driven higher by carmakers.
Shares in Daimler shot 3.2% higher after analysts goldman Sachs switched their advice to buy, saying the stock in the Mercedes-maker were 25% undervalued.
Moreover, it said changes in legal structure announced by the luxury carmaker last month could lead to a listing of the truck and bus division, which it estimated to be worth €31bn, thus opening up the possibility Daimler could unlock considerable value to shareholders.
Shares in BMW and Volkswagen both added 1.6%.
Paris closed 0.3% higher at 5,101.41, but London slid 0.3% to 7,354.13 points yesterday.
Wall Street was also mixed approaching midday, with the Dow adding 0.3%.
“US stocks are regaining some of Tuesday’s drop in early action, though global sentiment remains jittery in the face of exacerbated North Korea tensions, along with monetary and political uncertainties,” said analysts at Charles Schwab brokerage.
The dollar, already down against the safe-bet yen on geopolitical concerns, took another hit from comments by Federal Reserve officials playing down the chances of a third rate hike of the year and worries about a looming hurricane in the Atlantic.
Pedestrians walk past the London Stock Exchange. The FTSE 100 slid 0.3% to 7,354.13 points yesterday.
