The London stock market slid Friday as investors shrugged off news of a bomb attack in the British capital and instead took their cue from the surging pound. 

Sterling shot above $1.36 when a Bank of England policymaker signaled a rate hike for "the coming months," after British borrowing costs were this week left on hold at a record-low 0.25 percent.

Markets reacted little to the attack on a London Underground train, which police were treating as a terrorist incident. A number of people were injured.

"Londoners and markets alike take these sorts of incidents in their stride," ETX Capital analyst Neil Wilson told AFP.

"The FTSE's drop today is by and large about the pound's rally, as that depresses the foreign earnings of lots of the big blue chips."

Wall Street stocks also shrugged off the London attack and yet another North Korean missile launch, as the Dow Jones Industrial Average closed at its fourth straight record, and the broader S&P 500 also edged to a new all-time high.

- North Korea missile -

Every market sector showed increases, despite reports showing Hurricanes Harvey and Irma had a big impact on US retail sales and industrial activity in August that is likely to cut economic growth in the third quarter.

"They seem to be looking past the economy.  They want nothing to rain on their parade," economist Joel Naroff said in a commentary.

Eurozone trading was muted on Friday with Frankfurt and Paris stocks slipping 0.2 percent.

Asian markets were rattled after Pyongyang fired its second rocket over Japan's Hokkaido in less than a month, just days after the UN Security Council imposed sanctions in response to its nuclear test.

Analysts said the rocket traveled farther than any other it has fired, adding to fears about the North's ability to strike the US mainland with an atomic bomb.

But by the end of the day the losses had either been sharply cut back or reversed, with Seoul's Kospi closing 0.4 percent higher.

 - 'Rampant pound' - 

The British capital's FTSE 100 index of top companies fell 1.1 percent as sterling rebounded to $1.3616 -- the highest level since June 2016 -- before slipping back to $1.3590 later.

"Sterling rose to its highest against the US dollar since Brexit with its best weekly return since February 2009," noted Jasper Lawler, head of research at London Capital Group.

The pound was catapulted higher after the Bank of England's most dovish rate-setter revealed that he may back a hike "as early as in the coming months."

The possibility of a hike as early as the next BoE policy meeting in November comes as other central banks consider similar moves with world growth slowly improving.

Investors next week will be focusing on the US Federal Reserve meeting for clues about whether a third rate hike is likely this year despite persistently low inflation.

- Key figures around 2100 GMT - 

New York - DOW: UP 0.3 percent at 22,268.34 (close)

New York - S&P 500: UP 0.2 percent at 2,500.23 (close)

New York - Nasdaq: UP 0.3 percent at 6,448.47 (close)

London - FTSE 100: DOWN 1.1 percent at 7,215.47 points (close)

Frankfurt - DAX 30: DOWN 0.2 percent at 12,518.81 (close)

Paris - CAC 40: DOWN 0.2 percent at 5,213.91 (close)

EURO STOXX 50: DOWN 0.3 percent at 3,514.84

Seoul - Kospi: UP 0.4 percent at 2,386.07 (close)

Tokyo - Nikkei 225: UP 0.5 percent at 19,909.50 (close)

Hong Kong - Hang Seng: UP 0.1 percent at 27,807.59 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,353.62 (close)

Euro/dollar: UP at $1.1946 from $1.1915 

Dollar/yen: UP at 110.86 yen from 110.31 yen

Pound/dollar: UP at $1.3590 from $1.3400

Oil - Brent North Sea: UP 15 cents at $55.62 per barrel 

Oil - West Texas Intermediate: UNCHANGED at $49.89