While you were sleeping: North Korea unnerves stocks
By Margreet Dietz
July 5 (BusinessDesk) - Global equities declined while gold rose amid North Korea’s claim of the country’s first successful intercontinental ballistic missile test that brings the United States within its reach.
David Wright, co-director of the Global Security Program at the US-based Union of Concerned Scientists, said the flight time and distance suggested the missile could travel about 6,700 kilometres (4,163 miles), bringing all of Alaska into range, according to Reuters.
North Korea’s test came as US financial markets were closed for the July 4 holiday, and ahead of the Group of 20 meeting in Germany later this week, where US President Donald Trump is slated to meet with both his Russian and Chinese counterparts, Vladimir Putin and Xi Jinping.
Cheng Xiaohe, an associate professor of international relations at Renmin University in Beijing, said the missile test would force them to find some kind of common ground on North Korea, according to the New York Times. He did not specify what that might be, but he suggested that it would now be more difficult for Xi to stand by Pyongyang.
In Europe, the Stoxx 600 Index ended the session with a 0.3 percent drop from the previous close. The UK’s FTSE 100 Index slid 0.3 percent, while Germany’s DAX Index also declined 0.3 percent, and France’s CAC40 Index eased 0.4 percent.
“North Korea is continuing to provoke," Credit Agricole FX strategist Manuel Oliveri told Reuters. “It is a bit more important as it came ahead of the G20 meeting this week."
Shares of J Sainsbury gained 0.3 percent in London after the British supermarket chain that completed its takeover of Argos last year, posted better-than-expected like-for-like retail sales in the first quarter.
Retail like-for-like sales rose 2.3 percent, excluding fuel, in the 16 weeks to July 1, Sainsbury said in a statement.
“We have delivered a strong performance, driven by our differentiated strategy, offering customers quality, value and choice across food, general merchandise, clothing and financial services,” Mike Coupe, group chief executive, said in a statement.
"We have seen strong food sales where we have invested in product innovation, such as our new summer eating ranges," Coupe noted. "Our produce category, where we know quality matters most to customers, performed particularly well, outperforming the market."
Coupe cautioned as well, saying “the market is competitive and we continue to manage cost price pressures closely.”
On Wednesday the US Federal Reserve will release the minutes from its June meeting, during which it decided to raise its key interest rate, while the central bank will release its monetary policy report to Congress on Friday.