European equities rebound from N Korea-fuelled losses

European stock markets rebounded yesterday from heavy losses as US President Donald Trump’s measured response to North Korea’s missile launch reassured investors, dealers said.
European exchanges followed their Asian counterparts higher after overnight Wall Street gains, despite additional concern over tropical storm Harvey in the United States.
Markets were rocked Tuesday after nuclear-armed North Korea fired a missile into Japanese airspace, deepening geopolitical worries while sending safe-haven assets like gold higher.
“Relief returned to markets yesterday after two-days of concern over North Korean missile threats and the huge damage inflicted on Texas by tropical storm Harvey,” said market analyst Jasper Lawler at London Capital Group.
London closed 0.4% higher at 7,365.26 points, with Paris and Frankfurt gaining 0.5% at 5,056.34 and 12,002.47 points respectively. 
Seoul stocks – which shed 0.2% Tuesday – added 0.3%, Tokyo advanced 0.7% and Hong Kong rallied 1.2%.
Meanwhile “Wall Street opened mixed with any confidence drawn from faster economic growth in the second quarter balanced by a warning from Donald Trump that ‘Talking is not the answer’ to North Korea,” he added.
The Dow was flat approaching midday, while the S&P 500 and Nasdaq Composite both pushed higher.
The greenback also bounced back, supported by bargain-buying and a strong consumer confidence reading, while dealers were upbeat about upcoming US jobs data tomorrow.
The dollar had plunged Tuesday to as low as 108.50 yen as dealers rushed for safe havens.
The greenback also picked up against the euro, a day after the single currency hit $1.2070 – the highest level since January 5, 2015.
The euro has also been boosted by expectations the European Central Bank will soon start cutting down its stimulus, while talk of fresh Federal Reserve interest rate rises has eased.
Oil prices slid yesterday on fears of a long-term shutdown of refining capacity in the oil-rich Gulf Coast region due to Harvey, which will dampen demand for crude.
“WTI and Brent Crude oil price continue to be weak as demand at refineries is down due to disruption caused by the tropical storm in the US,” said market analyst David Madden at CMC markets UK. 
“Also playing in the refinery story is the high stockpiles of oil the US has encountered through much of this year, refineries are working their way through existing stockpiles rather than bringing in more,” he added.

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