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Global Shares Return to Record High

The Frankfurt Stock ExchangeThe Frankfurt Stock Exchange

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 a new peak as Europe’s insurers jumped 2.2% on hopes Irma would not prove as costly as feared, Reuters reported.

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 US Treasuries.

Irma caused a number of deaths and knocked out electricity to three million homes and businesses on its way up the Florida coast. But it had weakened to a category one hurricane and was expected to slow into a tropical storm during the day and to a tropical depression by Tuesday.

Winning a reprieve from risk aversion, the dollar registered its biggest gains in the currency markets in 10 days. It added 0.5% against its perceived safe-haven Japanese counterpart the yen and clawed back ground against the high-flying euro as an ECB policymaker flagged caution about the single currency’s recent rise.

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

The sense of relief lifted E-Mini futures for the S&P 500 ESc1 by 0.5%, while yields on 10-year treasury notes rose 3 basis points to 2.09%, barely budging in European trading.

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

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% to 91.490 still close to last week's 2-1/2-year low of 91.011.

The euro eased to $1.202, having hit a top of $1.209 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 sources said it planned to scrap reserve requirements for financial institutions settling foreign exchange forward yuan positions with effect from Monday.

The dollar was up 0.3% against the offshore yuan at 6.527 yuan, off a low of 6.443.

Bitcoin was quoted at $4,300 on the BitStamp platform, off a recent record high of nearly $5,000.

 

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