Markets fall after N Korea missile test but sentiment near euphoria

With the US market closed for a holiday on Tuesday, markets in Europe and Asia fell.

The Nikkei 225 fell 0.1 percent while the STOXX Europe 600 fell 0.3 percent.

Investor sentiment was hurt by a report that North Korea had successfully test-fired an intercontinental ballistic missile.

The missile test damped sentiment that, according to Mark DeCambre at MarketWatch, had just hit a 6-year high.

“Optimism reached its highest level on Wall Street since 2011 in June, according to strategists at BofA Merrill Lynch, including equity and quantitative strategists Savita Subramanian and Dan Suzuki,” he wrote.

“The recent inflection from skepticism to optimism could be the first step toward the market euphoria that we typically see at the end of bull markets and that has been glaringly absent so far in the cycle,” he quoted BofA as saying.