TSX hits 1-month low on risk aversion, lower oil prices

TSX hits 1-month low on risk aversion, lower oil prices

With the tense mood pushing European shares down for a third day and Wall Street set to fall again, global stocks were on course for their worst week since Donald Trump won November's USA presidential election.

The bigger surprise is that the cost to protect against declines in the kiwi against the US dollar for one month shot up to the most expensive levels since April.

European stock markets fell further in opening trade on Friday on intensifying fears over North Korea, dealers said.

Dow Jones Industrial Average futures were down 0.12%, S&P 500 futures fell 0.21%, and Nasdaq futures slid 0.32%.

Computer hardware stocks rebounded following recent weakness, with the NYSE Arca Computer Hardware Index climbing by 1.4 percent.

Overnight, Wall Street closed sharply lower after Trump, with fiery rhetoric, warned Pyongyang against attacking Guam or US allies after it disclosed plans to fire missiles over Japan to land near the US Pacific territory. Japan and South Korea vowed a strong reaction if the North were to go through with the plan.

USA trading volume has been low with summer setting in and Congress expected to be in recess until September 5.

"Korean tensions are pretty much the only horse in town".

Technology companies, which have been the biggest gainers this year as the market hit a succession of record highs, led the broad slide. Lam Research Corp. climbed $4.82, or 3.2 percent, to $154.26.

Banks and department store shares also were among the big decliners. Macy's was down 9.7 percent after the company said its sales continued to decline in the second quarter. The tech-heavy Nasdaq composite lost 2.1 percent to 6,216.87.

The last time the S&P closed down more than 1 per cent was May 17 when it fell 1.8 per cent.

And in bond markets, 10-year U.S. Treasuries and Germany's ultra-safe government bonds, known as Bunds, were trading at their highest prices since June.

Also rising was oil and gas services company Amec Foster Wheeler as pre-tax swung to a profit of £77m from a loss of £446m a year earlier, though.

On Thursday, Federal Reserve Bank of New York President William Dudley offered a positive outlook for the US economy, job market and inflation, saying better conditions would help support the most vulnerable Americans. WTI was last trading at $49.74 a barrel while Brent was at $52.95. Brent crude LCOc1 was up 80 cents at $53.50 a barrel and USA crude was up 60 cents and back up to $50.

Spot gold inched down 0.1 percent to $1,284.64 per ounce as of 0616 GMT, but was set for a weekly gain of over 2 percent. "You're less than 2 per cent off the high for the S&P heading into a weekend where uncertainty with North Korea still lingers".

The dollar extended losses against the yen to hit a new two-month low.

MARKETS OVERSEAS: Major indexes in Europe slumped.

The dollar index fell 0.32 per cent, with the euro up 0.42 per cent to US$1.1819. Netflix was down 1.8 percent.

Moreover, South Korea's five-year credit default swap premium - measuring market perception of a nation's default risk - reached the highest in 16 months at 0.66 percent Thursday, showed data from the ministry.

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