Markets shrug off Korean missile crisis

Stockmarkets wobbled when North Korea detonated its latest nuclear device, but they appear to be taking the international tension in their stride.

Equities appear to be suffering from "apocalypse ennui", says Leo Lewis in the Financial Times. Early this week, when North Korea tested its latest nuclear bomb, markets wobbled but didn't lose their footing. Major stockmarkets in Europe declined by up to 1%, while South Korea's Kospi lost 2%. Similarly, when North Korea fired a missile over Japan last month, the Nikkei dropped by only 0.9%. According to Nomura, there have been 30 incidents involving missiles or nuclear tests since Kim Jong-un took over North Korea in 2012. The Nikkei's average reaction to them has been a "measly" drop of 0.6%, says Lewis.

"We have been here now many, many times," says Rob Carnell of ING. "Unless this is a precursor to US military action, which we doubt, then. tensions will calm again, making this a good buying opportunity." This sums up the prevailing approach to political strife: ignoring it has been a winning strategy over the past 15 years, as BNY Mellon's Simon Derrick told The Economist's Buttonwood blog.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.