Global shares rise but tensions remain over North Korea, hurricane

By Hilary Russ

NEW YORK (Reuters) - Shares in Europe and the United States rose on Wednesday, but Asian markets fell and gold neared a 1-year high on investor concern about tensions on the Korean peninsula and a major hurricane barreling towards Puerto Rico and Florida.

The U.S. dollar fell against a basket of major currencies after weaker-than-expected manufacturing data and after Federal Reserve Vice-Chairman Stanley Fischer said he would resign in October.

"This means a sea change in the composition of the Fed, especially as it's not clear if Fed Chair (Janet) Yellen is going to get renominated. The composition of the Fed is going to look entirely different than it did just a couple of years ago," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.

The Dow Jones Industrial Average rose 61.07 points, or 0.28 percent, to 21,814.38, the S&P 500 gained 3.63 points, or 0.15 percent, to 2,461.48 and the Nasdaq Composite dropped 9.92 points, or 0.16 percent, to 6,365.65.

The greenback also hit its lowest against the Canadian dollar in more than two years after the Bank of Canada surprised many by raising rates.

The dollar fell as much as 1.9 percent against the loonie to C$1.2140, its lowest since mid-June 2015.

The pan-European FTSEurofirst 300 index rose 0.14 percent and MSCI's gauge of stocks across the globe gained 0.14 percent.

A meeting on Thursday of European Central Bank policymakers is expected to yield clues as to when they will begin to scale back monetary stimulus.

"A lot will depend on how (ECB President Mario) Draghi addresses the euro," said Commerzbank currency strategist Esther Reichelt, in Frankfurt. "The question is whether he'll address it strongly enough for the market to react."

Risk-averse investors were also still worried about North Korea's nuclear weapons tests. As tensions remained high, Russian President Vladimir Putin said on Wednesday that resolving the crisis is impossible with sanctions and pressure alone.

In the Caribbean, dangerous Category 5 Hurricane Irma slammed across islands with pounding winds and raging surf en route to a possible landfall in Florida this weekend.

"I think it (North Korea) is still going to be a factor with a bit of nervousness out there. We also have another hurricane heading towards Florida," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "We're already seeing water flying off the shelves at grocery stores."

Given the geopolitical tensions and weaker dollar, gold rose. Spot gold added 0.1 percent to $1,340.01 an ounce. U.S. gold futures gained 0.07 percent to $1,345.40.

MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.36 percent lower, while Japan's Nikkei lost 0.14 percent.

Oil prices rose as strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp drops due to Storm Harvey.

U.S. crude rose 1.05 percent to $49.17 per barrel and Brent was last at $53.96, up 1.09 percent.

(Reporting by Hilary Russ in New York; Additional reporting by Scott Malone in San Juan, Nigel Stephenson and Julia Payne in London, Sruthi Shankar in Bengaluru and Karen Brettell and Sam Forgione in New York; Graphic by Marc Jones; Editing by James Dalgleish)