As war shock to markets fades, world shares gain on back of Wall Street rally

Markets appeared to have recovered, for the moment, even as Israel was preparing for a likely ground offensive into Gaza and fears deepened that the conflict could spread along Israel's border with Lebanon. A weaker Chinese economy is a drag on regional and global trade and manufacturing, slowing the global recovery from the pandemic.

Bangkok : World shares advanced Tuesday after US stocks rallied as investors unwound some of last week's moves driven by worries about war in the Middle East. Oil prices slipped and US futures also edged lower.

Markets are awaiting China's latest economic growth figures, due Wednesday. Economists are forecasting that annual growth dropped to under 5 per cent in July-September from 6.3 per cent in the previous quarter. A weaker Chinese economy is a drag on regional and global trade and manufacturing, slowing the global recovery from the pandemic.

The futures for the S&P 500 and Dow industrials were up less than 0.1 per cent. In Asia, Tokyo's Nikkei 225 gained 1.2 per cent to 32,040.29 and the Hang Seng in Hong Kong added 0.7 per cent to 17,771.08. The Shanghai Composite index gained 0.3 per cent to 3,083.50. In Australia, the S&P/ASX 200 climbed 0.5 per cent to 7,056.10. India's Sensex advanced 0.6 per cent and the SET in Thailand rose 0.5 per cent.

Markets appeared to have recovered, for the moment, even as Israel was preparing for a likely ground offensive into Gaza and fears deepened that the conflict could spread along Israel's border with Lebanon. On Monday on Wall Street, the S&P 500 climbed 1.1 per cent for its best day since the October 7 surprise attack on Israel by Hamas. It closed at 4,373.63. The Dow rose 0.9 per cent to 33,984.54 and the Nasdaq composite added 1.2 per cent to 13,567.98.

The risk-off tone that permeated markets a few days ago seems to be dissipating thanks to a lot of shuttle diplomacy by (US Secretary of State Antony) Blinken and others in the region, Robert Carnell and Nicholas Mapa of ING Economics said in a commentary. However, all of this is before Israel mounts its ground offensive in Gaza, and that could turn sentiment rapidly sour again.

Oil prices have fallen back after a volatile week spurred by worries about disruptions to supplies from Iran because of the war. Early Tuesday, US benchmark crude oil was up 2 cents at USD 86.68 per barrel in electronic trading on the New York Mercantile Exchange. On Monday it fell USD 1.03 to settle at USD 86.66. It has been bouncing up and down since barrelling from USD 70 during the summer to more than USD 90 late last month.