Global shares fall after North Korea spooks investors

Stocks and the dollar fell while the Japanese yen, gold and sovereign bonds rose after North Korea’s most powerful nuclear test to date dampened investor appetite for risk.

The test, and reports from Seoul that Pyongyang was preparing for another missile launch, sparked warnings from Washington and drove South Korea’s stock market lower. Japan’s Nikkei lost almost 1%.

With Wall Street closed for the Labor Day holiday at the start of a week likely to become increasingly dominated by a number of central bank meetings, the fall in European stocks was less marked. The pan-European stocks index lost 0.4%, led by falls for banks.