European Shares Drift Lower On North Korea Tensions

European stocks fell on Monday to snap a three-day winning streak after North Korea conducted its sixth and most powerful nuclear test on Sunday, detonating what it said was a hydrogen bomb meant for intercontinental ballistic missile.

The United States warned it could launch a “massive” military response if it or its allies were threatened.

The pan-European Stoxx Europe 600 index was down 0.6 percent at 374.06 in late opening deals after rising 0.6 percent on Friday.

The German DAX was declining half a percent, France’s CAC 40 index was moving down 0.4 percent and the U.K.’s FTSE 100 was down 0.2 percent.

Banks paced the decliners, with Commerbank, Deutsche Bank, Credit Agricole, Societe Generale and Barclays falling around 1 percent each.

Inventiva shares tumbled 3.4 percent. The French biopharmaceutical company has extended an agreement with AbbVie Inc. (ABBV), a research-based biopharmaceutical company, to continue discovery and development efforts.

Fiat Chrysler dropped 1.4 percent after its Chief Executive Sergio Marchionne said on Saturday the car maker has not received any offer for the company nor was it is working on any “big deal”.

Swiss pharmaceutical company Novartis shed 0.8 percent after announcing the surprise departure of Chief Executive Officer Joseph Jimenez.

Software vendor Micro Focus International fell over 1 percent after completing a merger with HPE Software.

Reckitt Benckiser Group lost 1.2 percent after reports that four of its top 10 executives have quit the company.

Gold miners were on the rise as gold prices hit a 10-month high after the North Korean nuclear test and amid economic policy uncertainty in the U.S. Randgold Resources and Fresnillo both climbed around 2 percent.

Mining stocks also traded higher as copper jumped more than 1 percent to its highest level in three years. Antofagasta rose 0.8 percent and Glencore advanced 1.1 percent.

In economic releases, Eurozone investor morale improved unexpectedly in September, a survey showed today. The Sentix research group’s euro zone index rose to 28.2 points from 27.7 points in August.

Separately, U.K. construction activity growth eased to a one year low in August, survey data from IHS Markit showed. The corresponding PMI fell more than expected to 51.1 from 51.9 in July.

by RTT Staff Writer

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