Asian shares rebound despite Middle East tensions

Asian shares rebounded on Tuesday as investors bet that tensions in the Middle East would subside following a US air raid that assassinated senior Iranian military leader Qassem Soleimani in Baghdad last week.

Asian Shares

Shares had fallen sharply on Monday as Iran and the US traded threats after an US air attack killed a top Iranian commander.

  • MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.6 percent, recouping almost all of Monday’s losses.
  • Japan’s Nikkei rallied 1.3 percent and Shanghai blue chips advanced 0.5 percent.
  • E-Mini futures for the S&P 500 firmed 0.1 percent, while European equities futures rose 0.4 percent.
  • Wall Street chose to hope for the best and the Dow rose 0.24 percent, while the S&P 500 gained 0.35 percent and the Nasdaq 0.56 percent.

Currencies

  • The calmer mood saw the yen lose much of its safe-haven gains, with the US dollar bouncing to 108.42 yen from a low of 107.75 on Monday.
  • The euro edged up to $1.1195, but faces stiff chart resistance about $1.1240, while sterling made gains to $1.3172 on better economic data at home.
  • Against a basket of currencies, the US dollar had drifted off to 97.645 but stayed above the recent six-month trough of 96.355.

Commodities

  • Oil surrendered hefty gains as investors expressed optimism that Iran appeared less likely to launch retaliatory attacks against the United States in a way that could disrupt crude oil supplies from the Middle East.
  • Brent crude futures fell 54 cents to $68.37 a barrel, having been as high as $70.74 on Monday, while US crude dropped 44 cents to $62.83. It is currently trading about $4 less than its Monday high.
  • Gold also retreated to $1,557.54 an ounce, after scaling a near seven-year peak of $1,579.72 overnight.

Source: Reuters

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