2017.07.0420:57:00UTC+00Global Shares Lower Amid Geopolitical Unease

World shares retreated while bonds and gold climbed on Tuesday as a long-range ballistic missile test from North Korea and the July 4 holiday in the U.S. market reduced risk appetite.

Asian shares were lower while South Korea's won fell to a 16-week low after North Korea's missile landed in Japanese territorial waters amid Pyongyang claiming that it would strike “anywhere in the world”.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.6 percent. Japan's benchmark Nikkei pared gains to close 0.1 percent lower. Hong Kong was sharply hit by the regional jitters as it plunged as much as two percent at one point.

Europe saw a moderate decline as the pressure to lock in profit following Monday's largest gain in more than two months outweighed the recovery of commodity stocks as oil rises again after an overnight drop.

The perceived safe-haven Japanese yen and gold were both higher, as well as European bonds and Treasuries.

MSCI's widely-tracked emerging equity index fell to its sharpest one-day decline in almost three weeks and most Asian currencies were also weaker.

Signs have emerged that alongside the geopolitical jitters, higher global borrowing rates and the greenback were beginning to weigh on emerging markets after their outstanding start in 2017.