After North Korea threatened to take military action against its southern neighbour, some large banks as well as industrial stocks fell over concerns that a conflict with N. Korea might halt the global economic recovery. The Neo-Stalinist country’s threat comes after an alleged North Korean torpedo attack on a South Korean vessel, which spurred the South along with the United States to take part in some naval muscle flexing close to North Korean waters.
Among those firms and institutions which saw drops amid the tense situation were Bank of America Corp, which fell by 3.1 percent; and Alcoa Inc., which fell by over 5.1 percent. According to Art Hogan, chief market analyst at Jefferies & Co in New York, the situation sits as such: “We have got another round of taking off the risk trade going on around the world, and we’re doing it in pretty dramatic fashion.”
Furthermore, fears over a conflict with North Korea have also led to similar financial troubles in South Korea; the South Korean government apparently held an emergency session to discuss ways of soothing the fears of investors.
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- Clinton warns North Korea that the attack will have its punishment