Asia shares hit 10-year high on Irma, North Korea relief

Asian shares hit a 10-year peak on Tuesday with investors breathing a sigh of relief as North Korean fears eased slightly and the worst-case scenario from Hurricane Irma looked to have been avoided.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2 percent to its highest level since late 2007. Japan’s Nikkei added 1.0 percent. 

On Wall Street on Monday, U.S. S&P 500 Index surged over 1 percent to a record high close of 2,488 while MSCI’s broadest gauge of the world’s stock markets covering 47 markets also hit a new record high, having made its biggest gains in about two months. 

Insurers were among the biggest winners, with the MSCI World’s insurer index rising 1.5 percent on Monday, as insured property losses from Hurricane Irma’s are expected to be smaller than initially forecast.

Downgraded to a tropical storm early on Monday, Irma had ranked as one of the most powerful Atlantic hurricanes recorded. It cut power to millions of people. 

Adding to an uptick in risk appetite was relief that North Korea did not test-fire missiles or conduct nuclear tests over the weekend as some had feared. 

The United Nations Security Council unanimously stepped up sanctions against North Korea on Monday over the country’s sixth and most powerful nuclear test on Sept. 3, imposing a ban on the country’s textile exports and capping imports of crude oil. 

Still the measures were less severe than Washington’s initial proposal and U.S. Ambassador to the United Nations Nikki Haley said the United States was not looking for war with North Korea and that Pyongyang had “not yet passed the point of no return.”

Yet many investors are wary of possible retaliation by North Korea against the latest U.S. sanctions following its nuclear test earlier this month.