LONDON: World stock markets mostly rose Tuesday on fading concerns over North Korea and Hurricane Irma, but London dipped as strong inflation data sent the pound flying to a one-year dollar peak.
Frankfurt and Paris equities pushed higher as the North Korea crisis eased and dealers breathed a sigh of relief that Hurricane Irma caused less damage to Florida than initially feared.
However, London's benchmark FTSE 100 index was hobbled as official data showed Britain's 12-month inflation rate jumped to 2.9 percent in August compared to 2.6 percent in July,
In reaction, sterling jumped to $1.3282 -- last seen on September 13, 2016 -- on hopes the Bank of England could lift its key interest rate sooner than expected, although it is not forecast to make any change at its policy meeting on Thursday.
The strong pound weighs on multinational companies that earn income abroad, and therefore tends to send their share prices sliding.
"Sterling's FTSE-damaging rise prevented the UK index from indulging in the same North Korea and Hurricane Irma-related relief that lifted the US markets last night and is continuing to work its magic on the eurozone bourses," Spreadex analyst Connor Campbell told AFP.
Eurozone indices were also partly buoyed by the weaker euro versus the pound.
"The effect has been to push the FTSE 100 into negative territory with London's main index stumbling, while across the channel eurozone stocks continue to find buyers," added Chris Beauchamp, chief market analyst at IG.
- Tokyo leads Asia higher -
Tokyo stocks meanwhile led gains in Asia after yet another record performance on Wall Street.
The UN Security Council voted unanimously Monday to step up sanctions against North Korea, having won the crucial support of Russia and China, while the US held out hope for a peaceful resolution to the crisis.
The move provided a much-needed boost to investor sentiment after Pyongyang's September 3 nuclear test hammered markets last week and sent investors fleeing for the safe havens of gold and the yen.
Despite widespread speculation, North Korea did not mark its foundation day Saturday with another missile launch. This helped lift all three main New York indices more than one percent Monday, with the S&P 500 at a new record.
Eyes will now turn to the release of US inflation figures later in the week, which could provide some clues as to the Federal Reserve's plans for raising interest rates again this year. A weak run of data in recent months has led dealers to lower their expectations for any more tightening.
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