North Korean missile has City traders diving for cover

North Korea’s “unprecedented” missile launch over Japan sent panicked City traders rushing for the shelter of safe-haven assets today as they dumped shares.

The FTSE 100 index dived more than 100 points to its lowest level since May as nervy London dealers followed their Asian counterparts by dumping equities after the latest chapter in the North Korea saga, reigniting fears that a stock-market collapse could be round the corner.

The rogue state fired a ballistic missile over northern Japan that crashed into the sea. Japanese Prime Minister Shinzo Abe called it an “unprecedented” threat to his country.

Tensions between North Korea and US President Donald Trump have also been rising in recent months.

The latest missile launch dispels any notions that the country is backing down, with the US and South Korea currently conducting joint military exercises.

Trump and Abe vowed to ramp up pressure on North Korea and leader Kim Jong-un (pictured), and called for an emergency meeting of the United Nations Security Council.

The FTSE 100 plunged 104.26 points, or 1.4%, to 7297.20 as investors ditched stocks and rushed to safe-haven assets such as precious metals. The gold price rose $15.51, or 1.2%, to $1325.01 an ounce, its highest in almost a year.

Randgold Resources, the African gold producer listed in London, was among only a handful of shares that avoided the sell-off, surging 320p or 4.2% to 7890p. Mexican silver miner Fresnillo jumped 59.2p or 3.8% to 1639.2p.

The Japanese yen, also seen by investors as a safe-haven asset, was also in demand while the dollar slipped, hurt also by the flooding in Houston triggered by Hurricane Harvey .

Analysts suggested the sell-off of UK stocks — the FTSE 100 has lost almost 250 points in three weeks — could be the start of a wider market correction.

Neil Wilson at ETX Capital said: “There’s a lot building in the market at the moment that could be leading up to something”.

He added: “If you look at Trump, the debt ceiling, the Fed reducing its balance sheet — there is a lot of uncertainty and risk in play for equities globally.”