Investing.com - European stocks opened lower on Wednesday, as geopolitical tensions between the U.S. and North Korea intensified, prompting investors once again to flock to safer assets.
During European morning trade, the EURO STOXX 50 slid 0.28%, France’s CAC 40 fell 0.28%, while Germany’s DAX 30 slipped 0.17% by 03:35 a.m. ET (07:35 GMT).
Market sentiment weakened after a North Korean diplomat on Tuesday warned that his country was ready to send "more gift packages" to the U.S.
The threat came after the rogue regime conducted its sixth and largest ever nuclear test on Sunday, prompting U.S. Defense Secretary James Mattis to say that any threat to the U.S. or its allies would be met with a “massive military response”.
Financial stocks were broadly lower, as French lenders BNP Paribas (PA:BNPP) and Societe Generale (PA:SOGN) lost 0.14% and 0.81%, while Germany’s Deutsche Bank (DE:DBKGn) fell 0.12%.
Among peripheral lenders, Italy’s Unicredit (MI:CRDI) and Intesa Sanpaolo (MI:ISP) declined 0.35% and 0.43% respectively, while Spanish banks BBVA (MC:BBVA) and Banco Santander (MC:SAN) retreated 0.95% and 1.01%.
On the upside, Daimler AG NA O.N. (DE:DAIGn) shares surged 2.16% following news the German carmaker is investing €50 million in a new joint venture with U.S.-based ride-hailing start-up Via to offer on-demand shared shuttle services in European cities starting with London this year.
Engie SA (PA:ENGIE) saw shares edge up 0.14% after the French state said it would be selling a 4.1% stake in the utility company, as president Emmanuel Macron seeks funds for his policies.
The sale will reduce the state’s stake from about 29% to 25.5%, but the government will retain “more than a third of voting rights,” the Economy Ministry said in a statement.
In London, FTSE 100 dropped 0.45%, weighed by Barratt Developments (LON:BDEV), whose shares slumped 4.17%, after the home builder reported a 12.1% increase in pre-tax profit for the year ended 30 June 2017 to £765.1 million.
Rival company Berkeley Group Hldgs (LON:BKGH) added to losses, plummeting 3.84%, after it reaffirmed its full year guidance but warned that the London housing market continues to be affected by Brexit uncertainty and higher taxes.
Mining stocks were also broadly lower on the commodity-heavy index. Shares in Anglo American (LON:AAL) dropped 0.55% and Glencore (LON:GLEN) declined 0.74%, while BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) lost 1.22% and 2.45% respectively.
In the financial sector, stocks were on the dowside as HSBC Holdings (LON:HSBA) dropped 0.56% and Barclays (LON:BARC) slid 0.67%, while Lloyds Banking (LON:LLOY) retreated 0.76% and the Royal Bank of Scotland (LON:RBS) tumbled 1.17%.
Micro Focus International PLC (LON:MCRO) was the top performer on the index, surging 7.29%, still supported by news earlier in the week that the $8.8 billion spin-off and merger of Hewlett Packard Enterprise's software business was completed.
In the U.S., equity markets pointed to a moderately higher open. The Dow Jones Industrial Average futures pointed to a 0.09% gain, S&P 500 futures signaled a 0.10% rise, while the Nasdaq 100 futures indicated a 0.28% increase.