FTSE sell-off gathers strength on North Korea fears

European Shares Plummet

At 3:25pm BST, spot gold was selling at $1,286.73 an ounce, up 0.74% or $9.43, holding firm near two-month highs for the physical market in both London and Dubai.

Japan's benchmark Nikkei 225 inched down less than 0.1 percent to finish at 19,729.74.

"While it appears that Pyongyang's detailed strike plan against Guam has created a sour backdrop to trading, it's worth noting that US/North Korea tensions aren't having quite the same effect on the DAX and CAC", said Spreadex analyst Connor Campbell.

NORTH KOREA: President Donald Trump warned North Korea of "fire and fury" this week in response to recent threats from Pyongyang, which said it was examining plans for attacking Guam, a USA territory in the Pacific with a military base.

"That's what usually happens when there is a great concern over geopolitical issues with North Korea", said Kim Ye Eun, a stock analyst at Cape Investment & Securities.

Korea said it is examining an operational plan for firing a ballistic missile towards Guam. The Dow is up 34.62 points or 0.2% at 21,878.63, the Nasdaq is up 25.62 points or 0.4% at 6,242.49 and the S&P 500 is up 4.36 points or 0.2% at 2,442.57.

US stocks closed lower on Tuesday after Trump's comments sparked a late afternoon selling.

North Korea has threatened to attack the United States territory of Guam in the western Pacific amid an escalating war of words over its nuclear programme and a series of recent missile tests.

The CBOE Volatility Index, the most widely followed barometer of expected near-term stock market volatility, closed at its highest in about a month.

"North Korea doesn't seem like they're going to back down and the USA has also made a very strong stance this time".

A slight rise in a measure of USA consumer prices pointed to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year, which would be favourable to equity investors. "The market is interpreting it as lowering the odds of the Fed raising rates in December", said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. If you look at the gold price after the CPI data, it tells you that the Fed is not going to be in any rush to increase the interest rate this year. South Korea's Kospi also suffered a loss, giving back 0.4%.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in USA crude inventories, leaving prices volatile.

USA crude rose 0.43 percent to $48.80 per barrel and Brent was last at $52.01, up 0.21 percent on the day.

The utilities index .SPLRCU , often seen as a bond proxy because of its companies' slow reliable growth and high dividends, was the only S&P sector that ended the day up, showing a 0.25 percent gain.

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