Fresh geopolitical tensions push down European stock markets

The European stock markets opened lower during the early hours of trade on Monday as North Korea’s latest and most powerful nuclear test drove investors towards safe haven assets. The FTSE 100 index was trading at the 7,416 level, down by 21.47 points; CAC 40 index was trading at the 5,097 level, lower by 25.39 points; while the German DAX was at the 12,060 level, down by 82.32 points. The pan-European Stoxx 600 was higher by 0.64%.
 
North Korea on Sunday conducted its sixth nuclear test, of what it said was an advanced hydrogen bomb, prompting the threat of a massive military response from the United States if it or its allies were threatened. In response to Pyongyang’s test, South Korea carried out a live-fire exercise simulating an attack on North Korea. The missile drill saw ballistic missiles launched from fighter jets and from the ground. It came as US Defence Secretary James Mattis warned that any threat from North Korea towards the US or its allies would be met with a “massive military response”.
 
Meanwhile, the Japanese yen and sovereign bonds also climbed higher on Monday as North Korea’s nuclear test provoked a knee-jerk shift to safe havens, though equity losses were modest. The US markets are closed on Monday due to Labour Day holiday.