Shares return to record high as Irma loses strength

 

LONDON, Sept 11 (Reuters) - World shares returned to a record high on Monday, on relief that hurricane Irma looked to be losing strength in the United States and that North Korea's anniversary celebrations at the weekend passed without any new missile test.

MSCI All Country World Index, which tracks roughly 2,400 stocks in 47 countries, climbed to its latest peak as Europe's insurers rose more than 2 percent on hopes Irma's damage would not prove as costly as feared.

Wall Street's main markets were expected to gain around 0.5 percent when they reopen, having lost ground last week as the storm approached.

Irma caused a number of deaths and knocked out electricity to 3 million homes and businesses on its way up the Florida coast. But as the start of U.S. trading neared, it had weakened to a tropical storm and was expected to slow to a tropical depression by Tuesday.

The relief over North Korea and a weaker yen had also given Tokyo its best session since June in Asia, as investors began to lose their appetite for safer assets like gold and U.S. Treasuries.

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Hurricane Irma spreads destruction across Florida
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Hurricane Irma spreads destruction across Florida
A man died when his pickup truck crashed into a tree in the Florida Keys during Hurricane Irma in Florida, U.S. in this handout photo obtained by Reuters September 10, 2017. Monroe County Sheriff� Department/Handout via REUTERS REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.??
The crumbled canopy of a gas station damaged by Hurricane Irma is seen in Bonita Springs, Florida, U.S., September 10, 2017. REUTERS/Bryan Woolston
Flood water from Hurricane Irma surround a damaged mobile home in Bonita Springs, Florida, U.S., September 10, 2017. REUTERS/Bryan Woolston
The crumbled canopy of a gas station damaged by Hurricane Irma is seen in Bonita Springs, Florida, U.S., September 10, 2017. REUTERS/Bryan Woolston
A collapsed construction crane is seen in Downtown Miami as Hurricane Irma arrives at south Florida, September 10, 2017. REUTERS/Carlos Barria TPX IMAGES OF THE DAY
A local resident walks across a flooded street in downtown Miami as Hurricane Irma arrives at south Florida, U.S. September 10, 2017. REUTERS/Carlos Barria TPX IMAGES OF THE DAY
A boat rack storage facility lays destroyed after Hurricane Irma blew though Hollywood, Florida, U.S., September 10, 2017. REUTERS/Carlo Allegri
A smoke shop lays destroyed after Hurricane Irma blew though Fort Lauderdale, Florida, U.S., September 10, 2017. REUTERS/Carlo Allegri
Thomas Sanz clears a fallen branch as Hurricane Irma passes Miami, Florida, U.S. September 10, 2017. REUTERS/Stephen Yang
Mailboxes down caused by Hurricane Irma's strong winds and rain in The Vineyards in Monarch Lakes in West Miramar Sunday afternoon, Sept. 10, 2017. As the hurricane moved north up the Gulf coast, it brought violent weather to South Florida. (Taimy Alvarez/Sun Sentinel/TNS via Getty Images)
Palm Bay officer Dustin Terkoski walks over debris from a two-story home at Palm Point Subdivision in Brevard County after a tornado touched down on Sunday, Sept. 10, 2017. (Red Huber, Orlando Sentinel/TNS via Getty Images)
Brickell Avenue in Miami, Fla. was flooded after Hurricane Irma on Sunday, Sept. 10, 2017. (Mike Stocker/Sun Sentinel/TNS via Getty Images)
The Vineyards in Monarch Lake resident Syed Ali takes pictures of down tree limbs in his neighbor's front yard after Hurricane Irma left the Miramar community, sparing it from major damage other than down trees, branches and mailboxes on Sunday, Sept. 10, 2017. 'Thank God it didn't fall on either of our houses,' said Ali. (Taimy Alvarez/Sun Sentinel/TNS via Getty Images)
Brickell Avenue in Miami, Fla. was flooded after Hurricane Irma on Sunday, Sept. 10, 2017. (Mike Stocker/Sun Sentinel/TNS via Getty Images)
Flooding in the Brickell neighborhood as Hurricane Irma passes Miami, Florida, U.S. September 10, 2017. REUTERS/Stephen Yang
Flooding in the Brickell neighborhood as Hurricane Irma passes Miami, Florida, U.S. September 10, 2017. REUTERS/Stephen Yang
Flooding near the Hard Rock Stadium as Hurricane Irma passes Miami, Florida, U.S. September 10, 2017. REUTERS/Stephen Yang
Flooding in the Brickell neighborhood as Hurricane Irma passes Miami, Florida, U.S. September 10, 2017. REUTERS/Stephen Yang
Flooding in the Brickell neighborhood as Hurricane Irma passes Miami, Florida, U.S. September 10, 2017. REUTERS/Stephen Yang
Fallen trees and flooded streets from Hurricane Irma are pictured in Marco Island, Florida, U.S. in this handout photo obtained by Reuters September 10, 2017. Marco Island Police Department/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.??
Flooding in the Brickell neighborhood as Hurricane Irma passes Miami, Florida, U.S. September 10, 2017. REUTERS/Stephen Yang
Boats are seen at a marina in Coconut Grove as Hurricane Irma arrives at south Florida, in Miami, Florida, U.S., September 10, 2017. REUTERS/Carlos Barria
Boats are seen at a marina in Coconut Grove as Hurricane Irma arrives at south Florida, in Miami, Florida, U.S., September 10, 2017. REUTERS/Carlos Barria
A partially submerged car is seen at a flooded area in Coconut Grove as Hurricane Irma arrives at south Florida, in Miami, Florida, U.S., September 10, 2017. REUTERS/Carlos Barria
Boats are seen at a marina in Coconut Grove as Hurricane Irma arrives at south Florida, in Miami, Florida, U.S., September 10, 2017. REUTERS/Carlos Barria
Palm trees blow in the winds of hurricane Irma in Bonita Springs, Florida, northeast of Naples, on September 10, 2017. Hurricane Irma regained strength to a Category 4 storm early as it began pummeling Florida and threatening landfall within hours. / AFP PHOTO / NICHOLAS KAMM (Photo credit should read NICHOLAS KAMM/AFP/Getty Images)
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Winning a reprieve from risk aversion, the dollar registered its biggest gains in the currency markets in 10 days. It added 0.5 percent against its perceived safe-haven counterpart, the Japanese yen, and regained ground against the high-flying euro as a top ECB policymaker cautioned against the single currency's recent rise.

"The fact the worst-case scenario for Hurricane Irma hasn't happened and that North Korea managed to get though its national day without sticking two fingers up at the rest of the world has helped ratchet the tensions down," said CMC Markets senior analyst Michael Hewson. "So I think we are going to see the S&P and the Dow gap higher on the open."

Japan's Nikkei had risen 1.4 percent after Pyongyang held a celebration to congratulate the nuclear scientists and technicians who steered the country's sixth and largest nuclear test a week earlier.

The United States and its allies had been bracing for another long-range missile launch to mark the 69th anniversary of North Korea's founding on Saturday.

The sense of relief lifted E-Mini futures for the S&P 500 by 0.5 percent, while yields on 10-year Treasury notes rose 3 basis points to 2.09 percent, after barely budging in European trading.

South Korea's main index added 0.8 percent, while MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4 percent.

"It's too early to say the (North Korean) risks are gone, but one thing for sure is that market players now think the situation won't get worse as it did some weeks ago," said Lee Kyung-min, a stock analyst at Daishin Securities in Seoul.

Lee said many foreign investors and domestic institutions were purchasing South Korean tech and chemicals shares as quarterly earning season neared.

The U.N. Security Council is set to vote on Monday on a watered-down U.S.-drafted resolution to impose new sanctions on North Korea over its recent nuclear tests, diplomats said. It was unclear whether China or Russia would support it.

RELAXED YUAN CONTROLS?

The dollar hovered at 108.50 yen, up from Friday's 10-month trough of 107.32. Against a basket of currencies, it added 0.15 percent to 91.490, still close to last week's 2 1/2-year low of 91.011.

The euro eased to $1.2020, having hit a top of $1.2092 on Friday amid speculation the European Central Bank was closer to starting a wind-back of its stimulus program.

China's central bank was also a focus in Asia after it confirmed reports that it planned to scrap reserve requirements for financial institutions settling foreign exchange forward yuan positions with effect from Monday.

"The removal potentially makes it easier for traders to purchase the USD, easing the pressure for yuan appreciation," analysts at ANZ said in a note. "The change likely signals some discomfort about the stronger yuan and its impact on Chinese exports."

The dollar was up 0.3 percent against the offshore yuan at 6.5269 yuan, off a low of 6.4437.

There were also reports Beijing was planning to shut down local crypto-currency exchanges, dealing a blow to bitcoin's recent rally.

Bitcoin was quoted at $4,185 on the BitStamp platform, off a recent record high of nearly $5,000.

In commodity markets, gold slipped 0.7 percent to $1,337.81 an ounce, away from a one-year peak of $1,357.54.

Oil prices regained ground after the Saudi oil minister discussed the possibility of extending a pact to cut global oil supplies beyond March 2018 with his Venezuelan and Kazakh counterparts.

The news of the talks on Sunday helped offset the downward pressure on oil prices amid worries that energy demand would be hit hard by Hurricane Irma.

U.S. crude was trading 20 cents firmer at $47.68 a barrel, while Brent slipped 24 cents to $53.50.

(Additional reporting by Wayne Cole in Sydney; editing by Larry King)

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Markets

NASDAQ 6,426.92 4.23 0.07%
S&P 500 2,502.22 1.62 0.06%
DJIA 22,349.59 -9.64 -0.04%
NIKKEI 225 20,296.45 -51.03 -0.25%
HANG SENG 27,880.53 -229.80 -0.82%
DAX 12,592.35 -7.68 -0.06%
USD (per EUR) 1.19 0.00 0.02%
USD (per CHF) 0.97 0.00 -0.08%
JPY (per USD) 111.99 -0.46 -0.41%
GBP (per USD) 1.35 -0.01 -0.62%

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