LONDON: Europe's main stock markets traded mixed Tuesday as Wall Street fell upon its return from a long holiday weekend dominated by North Korea's weekend nuclear test.
The US ambassador to the United Nations Nikki Haley told an emergency Security Council meeting on Monday that Pyongyang was "begging for war" and called for the "strongest possible measures" against Kim Jong-Un's regime.
The test, which North Korea says was of a hydrogen bomb, came less than a week after it fired a rocket over Japan, while Seoul said there were signs the reclusive state was preparing to launch another.
"US stocks are lower in early action, returning to action following the long holiday weekend, with global sentiment exacerbated by news over the weekend that North Korea detonated a hydrogen bomb and may be preparing another ICBM test," said analysts at Charles Schwab brokerage.
Stocks in Asia and Europe had fallen Monday in response to the unfolding drama, but investors took a more sanguine approach on Tuesday, dealers said.
"Flare-ups on the Korean peninsula are fast becoming a weekly occurrence," noted analyst Michael Hewson at trading firm CMC Markets UK.
"While financial markets remain nervous about the potential for the next dangerous conflagration, each escalation on the part of North Korea seems to elicit a milder market reaction than the previous one."
Asian equities nevertheless struggled Tuesday and safe-haven yen and gold held gains as traders mulled the latest North Korea test that has prompted warnings of US military action.
In Europe, early gains in Paris and London were swept away as the opening bell on Wall Street approached.
Frankfurt managed to stay solidly in the green.
"Germany's DAX is flirting with a bullish breakout on autos-friendly rhetoric from Merkel..." said Mike Van Dulken, head of market research at Accendo Markets.
Chancellor Angela Merkel on Monday pledged a billion euros to help German cities fight air pollution caused by dirty diesel cars, while coming out solidly against cities banning the vehicles which would hurt automakers.
London equities were penalised by disappointing data. Britain's services sector grew at the slowest pace in almost a year in August amid uncertainty over Brexit, a survey showed on Tuesday.
The purchasing manager's index for services fell to 53.2 in August from 53.8 in July, data compiler IHS Markit revealed.
That undershot market expectations of a fall to 53.5, though it remained above the 50 figure which indicates expansion.
The service sector, which accounts for around 80 percent of British economic activity, grew at the slowest pace since September 2016.
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