World stocks were mostly lower on Friday after North Korea launched another missile and as central banks continued to point to tighter monetary policy in coming months.
KEEPING SCORE: Britain’s FTSE 100 was the biggest loser, falling 1.2 percent to 7,208 after the pound surged on expectations of interest rate increases soon. Germany’s DAX lost 0.1 percent to 12,531 and France’s CAC 40 edged 0.1 percent lower as well, to 5,220. Wall Street was poised to open lower. Dow and S&P 500 futures both crept 0.1 percent lower.
MISSILE TENSIONS: North Korea launched an intermediate-range missile that flew 3,700 kilometers (2,300 miles), setting off alarms as it flew over Japan to land in the Pacific Ocean. The launch was the latest sign of Pyongyang’s willingness to defy international opinion as it moves closer to building up a military arsenal targeting U.S. forces. Asian markets fell in early trading but some regained their footing later, in a sign the initial shock for investors quickly wore off.
TRADER TALK: “Another day, another missile from North Korea,” said Rob Carnell, ING’s head of Asia research. “It would be wrong to say that markets are not taking any notice, but the relatively muted responses of the Japanese yen and Korean won, and risk assets globally, suggest that a sense of fatigue on this belligerence is creeping in.”
CENTRAL BANKS: The pound continued to surge, rising 1.3 percent to $1.3579, as Bank of England officials confirmed they expect to start raising interest rates for the first time in a decade in coming months. The central bank surprised Thursday with the message, which was reiterated by one of its officials Friday. The pound’s rise weighs on the FTSE 100 index because many of its listed companies are multinationals whose earnings abroad are decreased when translated back into pounds.
Meanwhile, investors are also digesting U.S. economic data as they await the Fed’s next move on rates. Data released Thursday showed U.S. consumer prices rose in August at their fastest pace in seven months. Industrial production and retail sales figures are due Friday, which could provide more hints on whether the Fed, which holds a scheduled two-day meeting wrapping up Wednesday, will remain on track to raise rates by the end of the year.
ASIA’S DAY: Japan’s benchmark Nikkei 225 index added 0.5 percent to 19,835.30 as the dollar spiked lower after the launch but then staged a quick recovery, making shares of exporters more attractive. South Korea’s Kospi recouped initial losses to end 0.4 percent higher to 2,386.07. Hong Kong’s Hang Seng edged up 0.1 percent to 27,807.59 while the Shanghai Composite in mainland China shed 0.5 percent to 3,353.62. Australia’s S&P/ASX 200 sank 0.8 percent to 5,695.00. Taiwan’s benchmark rose and Southeast Asian shares were mostly higher.
ENERGY: Oil pushed up further from a seven-week high. Benchmark U.S. crude futures gains 1 cent to $49.90 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 59 cents to settle at $49.89 a barrel Thursday, the highest closing price since the end of July. Brent crude, used to price international oils, added 8 cents to $55.55 barrel in London.
CURRENCIES: The dollar slumped against the yen immediately after news of the launch but recovered quickly and rose to 111.24 yen, the highest level since late July. The euro strengthened to $1.1954 from $1.1919.