- Safety rush turns to relief rally as Mideast tension ebbs
- Nikkei adds 2%, Australia hits record closing high
- Yen slides to two-week low
- Support for oil and gold hints at caution remaining
SINGAPORE: Asian stocks had their best session in weeks on Thursday, as the United States and Iran backed away from the brink of conflict in the Middle East and investors reversed their flight to safety.
US President Donald Trump responded to an Iranian attack on US forces with sanctions, not violence. Iran offered no immediate signal it would retaliate further over a Jan. 3 US strike that killed a senior military commander.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.3%, its sharpest gain in almost a month.
Hong Kong’s Hang Seng and Shanghai blue chips each added more than 1%, while Japanese stocks rose further, gaining 2% to their highest for the year so far.
Australian stocks rose 0.8% to a record closing high. Futures markets pointed to extended gains in Europe and the United States, with S&P 500 futures up 0.2% and German DAX futures 0.9% higher.
“I think today is a bit of a relief rally,” said Shane Oliver, Chief Economist at AMP Capital in Sydney.
“Yesterday, investors were fearing the worst, that this was the escalation now underway. The news overnight has been more along the lines that Iran pulled its punches and Trump is toning things down,” he said, “which is seen by investors as substantially reducing the risk of a war.”
Read the full news article on The Himalayan Times.