World stock markets drifted in subdued trade yesterday as investors took to the sidelines following last week’s Syria strike and sabre-rattling on the Korean peninsula.
London outperformed its peers as the market digested news that Britain’s inflation rate held at a 3.5-year peak in March.
The British capital’s index climbed 0.2% to 7,365.50, while Frankfurt and Paris both closed lower.
“Cautious investors are heading for the sidelines amid geopolitical uncertainty in the Middle East, the Korean Peninsula and the upcoming French election all contributing to dampen sentiment and risk appetite ahead of the long (Easter) weekend break,” said Andy McLevey at online stockbroker Interactive Investor.
Wall Street’s Dow index extended losses approaching midday in New York, also a victim of many investors shunning stocks in favour of safety in the form of government bonds and gold.
The price of gold, a safe haven investment, rose 1.6% on the day, while the yield on the benchmark 30-year US government bond eased by 1.8%.
“Geopolitical concerns continue to fester towards North Korea and Syria,” said analysts at the Charles Schwab brokerage.
US President Donald Trump’s administration has rankled Moscow by saying it sees no peace in civil war-hit Syria while Bashar al-Assad remains president, while Russia has described last week’s US strikes as inflicting “considerable damage” to already “lamentable” bilateral ties.
Washington said the strikes were in retaliation for a chemical attack on rebel forces that killed dozens.
US Secretary of State Rex Tillerson flew to Moscow yesterday where he will discuss the crisis with his counterpart Sergei Lavrov as members of the Group of Seven leading economies meet in Italy to hammer out a plan aimed at getting Russia to rein in Assad.
The tensions also hit Asian markets, with Tokyo down 0.3% and Hong Kong 0.7% lower.
The dollar fell against the yen and the euro after US Federal Reserve boss Janet Yellen said the central bank would stick to its plans to raise interest rates only gradually.