NZX50 drops 1 per cent as North Korean tension escalates, local uncertainty rises

The New Zealand benchmark stock index dropped 1 per cent this morning as fear about nuclear tensions between North Korea and the United States dragged global equities down.

An hour after trading opened this morning, the S&P/NZX50 index was down 79.2 points, or 1 per cent, to 7,710.51. Some 40 of the stocks in the index had fallen, with seven unchanged and just three up.

Equities slid overnight as tension continued to escalate, with US President Donald Trump threatening that if the North Korean regime "does anything" to the US or a US ally "things will happen to them like they never thought possible", after Pyongyang announced its plan to fire four missiles near the US territory of Guam.

The S&P 500 Index closed 1.5 per cent lower, the Nasdaq Composite dropped 2.1 per cent and the Dow Jones Composite fell 1.4 per cent.

Wall Street's fear gauge-the CBOE Volatility Index or the VIX-jumped 44 per cent to 16.04, the highest it has been since Trump was elected November last year.