World stocks set new record highs on Friday and the prices of safe-haven assets such as gold pulled back as investors cheered an apparent de-escalation in U.S.-Iran tensions and looked instead to prospects of improved global growth, Reuters informs.
Markets have swiftly reversed the sharp falls seen at the start of the week after the United States killed Iran’s most senior general, believing it would not lead to a full-scale military confrontation that would rock investor confidence.
The MSCI world equity index .MIWD00000PUS, which tracks shares in 49 countries, has quickly resumed its rally and added another 0.1% on Friday to hit a new record high. It is almost 1.5% above the lows seen on Monday.
European shares were mixed at the open, with pan-European Euro Stoxx 50 .STOXX50E down 0.16%, the German DAX .GDAXI up 0.06% and Britain’s FTSE .FTSE 0.1% ahead.
That followed record levels in the three major share indexes on Wall Street on Thursday. Stock markets have got off to a strong start in 2019 despite U.S. President Donald Trump’s decision to kill military commander Qassem Soleimani, the second most powerful figure in Iran, in a missile strike in Baghdad.
“In the space of a few days we appear to have swung full circle; with investors seemingly convinced that the problems in the Middle East appear to have settled down, at least for the time being,” said Michael Hewson, chief markets analyst at CMC Markets.
“Investors now have the opportunity to focus on the signing of the new U.S.-China phase one trade deal next week, as well as the health of the U.S. economy today, and in particular the labor market which has continued to look resilient,” he added, referring to all-important U.S. non-farm payrolls data due at 1330 GMT.
While markets judge the United States and Iran to be making moves to defuse the tensions, investors also welcomed news that sales of Apple’s iPhones in China in December jumped more than 18% on the year, Reuters adds.
Investors digested the report as a prelude to the upcoming visit by China’s Vice Premier Liu He, head of the country’s negotiation team in Sino-U.S. trade talks, to Washington next week to sign a trade deal with the United States.