Global shares rise as worries recede on Iran, US tensions

TOKYO (AP) — Global shares mostly rose yesterday as worried receded that the United States (US) and Iran might be stepping closer to the edge of war.

France’s CAC 40 slipped 0.2 per cent to 6,031.15, while Germany’s DAX added nearly 0.1 per cent in early trading to 13,505.63. Britain’s FTSE 100 was little changed, down less than 0.1 per cent at 7,593.34. US shares were set to drift higher with Dow futures up 0.1 per cent at 28,969. S&P 500 futures were up 0.2 per cent at 3,280.70.

Japan’s benchmark Nikkei 225 edged up 0.5 per cent to finish at 23,850.57. Australia’s S&P/ASX 200 rose 0.8 per cent to 6,929.00. South Korea’s Kospi gained 0.9 per cent to 2,206.39. Hong Kong’s Hang Seng is up 0.3 per cent at 28,638.20, while the Shanghai Composite inched down nearly 0.1 per cent to 3,092.29.

On Wall Street, money flowed into riskier investments, such as technology stocks, and trickled out of traditional hiding spots for investors when they’re nervous, such as gold. A measure of fear in the stock market had its largest drop in a week.

Stocks have been rallying after investors took comments from US President Donald Trump and Iranian officials to mean no military escalation is imminent in their tense conflict. Markets had tumbled on the threat of war after the US killed a top Iranian general in a drone strike.

Chinese investors use computer terminals as they monitor stock prices at a brokerage house in Beijing.
PHOTO: AP

Diminishing worries about a US-Iran war put more of the market’s focus on the economy, corporate profits and other inputs that directly affect stock prices.

“The market is in pretty solid shape,” said Portfolio Manager at Summit Global Investments Matt Hanna. “We could see some volatility in the beginning of 2020” following a well-worn path of choppy first halves for stocks during presidential election years, “but we don’t see any sort of recession on the horizon”.

Across markets, worries about a recession have faded since last year as central banks cut interest rates and pumped stimulus into the global economy. US and China also moved toward an interim deal in their trade war. China confirmed on Thursday that its chief envoy in tariff talks with Washington will visit next week to sign their ‘Phase 1’ trade deal.

“Risk appetite continues to improve as investors judged the US-Iran tensions to not be as concerning as thought while focussing on the upcoming leads including US-China trade and a potential payrolls surprise into the end of week,” said Jingyi Pan, market strategist at IG in Singapore.

The spotlight will move next to the latest labour report in the United States (US), and economists expect it to show employers added 160,000 jobs last month. They also forecast the unemployment rate to hold at its low level of 3.5 per cent. The numbers are key because a strong job market has been propping up the economy and allowing US households to continue to spend, even as manufacturing weakens due to tariffs and trade wars.

ENERGY

Benchmark US crude fell eight cents to USD59.48 a barrel. It slipped five cents to USD59.56 a barrel on Thursday. Brent crude, the international standard, rose two cents to USD65.39 a barrel.

CURRENCIES

The dollar rose to 109.59 Japanese yen from 109.36 yen on Thursday. The euro fell to USD1.1097 from USD1.1114.