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GLOBAL MARKETS-Axed U.S.-North Korea meeting sinks shares; trade worries hurt autos

Published 25/05/2018, 02:07 am
© Reuters.  GLOBAL MARKETS-Axed U.S.-North Korea meeting sinks shares; trade worries hurt autos
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* Trump cancels summit with North Korea scheduled for next month

* U.S. probe into auto imports weighs on automakers

* Wall Street opens lower on U.S.-North Korea

* Turkish lira falls back as much after rate hike (Updates with opening of U.S. markets; changes dateline, previous LONDON)

By Laila Kearney

NEW YORK, May 24 (Reuters) - President Donald Trump's move to cancel a planned June meeting with North Korean leader Kim Jong Un sent global shares lower on Thursday, while auto stocks continued to decline on tariff fears.

Trump, in a letter to North Korea released by the White House, called off the June 12 summit, citing "tremendous anger and open hostility" in a recent statement by the East Asian country. The cancellation came even after North Korea followed through on a pledge to blow up tunnels at its nuclear test site. the release of Trump's letter, stocks sank.

On Wall Street, the Dow Jones Industrial Average .DJI fell 195.64 points, or 0.79 percent, to 24,691.17, the S&P 500 .SPX lost 16.39 points, or 0.60 percent, to 2,716.9 and the Nasdaq Composite .IXIC dropped 41.78 points, or 0.56 percent, to 7,384.18.

The pan-European FTSEurofirst 300 index .FTEU3 lost 0.58 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.42 percent.

As the latest U.S.-North Korea concerns boosted investor appetite for low-risk debt, U.S. 10-year Treasury yields fell to a session low of 2.97 percent. prices were propelled above $1,300 per ounce on apparently rising tensions between Trump and Kim. gold XAU= added 0.9 percent to $1,305.01 an ounce. U.S. gold futures GCcv1 gained 1.19 percent to $1,304.90 an ounce.

Meanwhile, some investors interpreted Trump's message with caution.

"I think this is a bit of poker playing, or gamesmanship, that's going back and forth and it wouldn't shock me if a week from now, the meeting is back on," said Joe Saluzzi, co-head of equity trading at New Jersey-based Themis Trading LLC.

AUTOS

Markets had plenty more to digest, including minutes from the latest Fed and ECB meetings, but in Asian and European trading, it was U.S. plans to investigate auto imports that caused the biggest moves. on Wednesday ordered a national security probe into car and truck imports that could lead to new tariffs, with China calling the move an "abuse" of the clauses and saying it would defend its interests.

Japan's Nikkei .N225 ended down 1.1 percent after Nissan, Mazda and Toyota all fell .T .

In Europe, BMW BMWG.DE , Daimler DAIGn.DE and Volkswagen VOWG_p.DE lost between 2.8 and 3.2 percent. .EU .SXAP

In the currency markets, Turkey's lira remained the big mover. It weakened to beyond 4.79 against the dollar, surrendering most of the gains it made a day earlier after the Turkish central bank jacked up its key interest rate by 300 basis points to prop up the plunging currency dollar fell against a basket of currencies .DXY and hit a two-week low against the Japanese yen, after the U.S.-North Korea meeting was nixed. /FRX

Oil prices recorded their largest one-day drop in two weeks amid expectations OPEC could wind down an output deal that has been in place since the start of 2017 due to concerns about supplies from Venezuela and Iran. crude CLcv1 fell 0.93 percent to $71.17 per barrel and Brent LCOcv1 was last at $79.19, down 0.76 percent.

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