FTSE 100 takes cover from war of words over South Korea

July's 0.1 percent increase in consumer prices suggests that the Federal Reserve may be less likely to raise interest rates next month.

London's FTSE 100 dipped by about 90 points, or more than 1%, in morning trading on Friday, adding to a slump of more than 100 points the day before and taking it to its lowest level since May.

"The slight bias to the upside (in stocks) is a result of the CPI number". Weakness in the Materials and Telecom Services sectors weighed on the market. Trading was thinner than usual, with Japanese markets closed for a public holiday.

"There's not a great incentive to buy big", said Lerner of SunTrust Advisory. The September copper contract was down two cents to $2.91 a pound. According to the data released by the Bureau of Labor Statistics on Tuesday, the U.S. JOLTs Job Openings rose to 6.163 million in June-higher than May's reading of 5.702 million and the market's forecast of 5.775 million.

The dollar index.DXY, which tracks the greenback against six rival currencies, was down 0.17 percent to 93.391.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.48 percent lower. Apple is still up 35% for 2017 and hovers near a record high.

WALL STREET: Losses in health care and consumer-focused companies pulled USA stocks lower, snapping a 10-day winning streak for the Dow Jones industrial average.

Nervous investors drove shares lower earlier in the week, after President Trump declared Tuesday that the US would react with "fire and fury" to further nuclear provocations from North Korea.

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"My experience of being a manager, always the beginning of the season the new ones are the toughest ones", Guardiola added. We have to deal with that and handle that. "City are probably not going to know as much about us as we do about them".

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A U.S. attack using its bases on Japan's main islands or Okinawa, for example, would bring Japan into any conflict, says Schuster. Andersen Air Force Base on Guam is where the U.S. keeps its B1-B bombers deployed to the Asia Pacific.

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As the Brahmaputra water rises alarmingly, authorities suspended ferry services in Majuli, Dibrugarh and Guwahati . Armed forces and disaster relief forces, engaged in relief and rescue operations, evacuated 2,615 stranded people.

Japan is the world's biggest creditor country and there is an assumption investors there will repatriate funds in a crisis.

Sterling touched a three-week low against the dollar as a mixed bag of output and trade data did little to alter investors' downbeat view of an economy struggling to meet Bank of England targets.

Disappointing US inflation and jobs data have not helped the dollar.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY.

Equity markets around the world had fallen as the war of words between the USA and North Korea escalated, with the Dow recording its second negative close, although its 0.2 per cent loss was smaller than in other bourses. It was last up 1.2pc at 1.1305 per euro.

Baker Avenue's Lip said the US market was higher due to "bargain hunters", but "there's more room for the market to come down". That is significant because yields fall when bond prices rise.

US gold futures for December delivery rose 0.2 percent to $1,291.80 per ounce.

Gold has risen to its highest level in nearly two months, while the Swiss franc has powered against the U.S. dollar and seen its biggest one-day gain against the euro in more than two and a half years. Brent crude, used to price global oils, added 26 cents to $52.96. Northern Star Resources was up 3 per cent, while Evolution Mining rose 2 per cent, Newcrest Mining gained 2.3 per cent and Resolute Mining rose 2.1 per cent. Westgold Resources was the biggest gainer, rising 6.6 per cent.

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