Tuesday, August 29: rising geopolitical tensions in Asia saw global equity indices nudged lower as Europe and the UK opened for trade. Reports emerged that North Korea had fired several ballistic missiles including one that flew over Japan, eventually landing in the Pacific Ocean. At mid-day all major European indices were roughly a percent lower or more, with the S&P also shaping lower after the open as investors took risk off the table. The provocative nature of this action also saw the US dollar weaken against sterling, the yen and the euro as market participants pre-empted more Trump-style brinkmanship from the US, with Kim Jong-un’s clear dismay for the United States also prompting a flight to safety.
Randgold(+4.38%) and Fresnillo(+2.92%) were a couple of only a handful of stocks in the green on the primary index. The metals miners rode a wave of risk-aversion as investors flocked to the safe haven asset of gold, driving it >$22/oz. higher to as high as $1322/oz in under 24 hours. Both the Swiss franc and euro were also bid higher, representative of a haven-like status.
ITV(-2.47%) slipped on a read-across from a German broadcaster pertaining to the advertising market in Europe. Despite buoyant economic data supportive of a bullish retail environment in Europe, ProSeibenSat.(-14.53%) cut revenue guidance for the third-quarter in the German-speaking broadcast segment with higher TV advertising revenues not expected to come to fruition. This marked the third downgrade for advertising revenues this year, as the business also announced it may look for external investors. Major companies that rely on ad revenue have been reporting spending cuts from the likes of FMCG businesses Unilever, Procter & Gamble and Nestle.
Across Europe, indices were down at the close with the FTSE 100 -0.87%, the DAX 30 -1.48% and the CAC 40 -0.95%.