The European open has seen stock indices open in the red following news overnight that North Korea have carried out another missile test in what appears to be a deliberate act of defiance in the face of the recent ratcheting up of UN sanctions on Pyongyang. The missile traveled close over the Japanese island of Hokkaido before ending up in the Pacific ocean, but this is now the 4th provocative action from North Korea in just over a month and each one threatens to further escalate an increasingly tense geopolitical situation, which at present remains simply a flexing of military muscles but could quickly become a full-blown conflict.
Given the news, the reaction in the markets has been surprisingly muted with an initial knee jerk reaction seeing traditional safe havens such as the Japanese Yen spike higher before paring the moves somewhat. Even though European stocks are in negative territory the selling is far from large scale with declines of only 0.2% seen in the German Dax for instance. The FTSE 100 is called to open lower too but there is a feeling that the markets are in fact becoming less sensitive to thses developments with the latest moves significantly smaller in scale than others seen in recent weeks following North Korean indiscretions.
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