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Global Markets: Sterling and metals shine brightest as risk appetite returns

Reuters  |  LONDON 

By Marc Jones

(Reuters) - A gradual return of risk appetite lifted world shares on Tuesday, while there were milestones aplenty as sterling hit a post-Brexit high and U.S. sanctions on drove aluminium prices to a 7-year peak.

Chinese data that provided a bit of something for everyone kept largely in check overnight, but started well with only London's FTSE lagging as the pound's power weighed on its big exporters.

There were more signs of opening up its too and a steadier Russian rouble showed investors were also gradually shifting attention away from tensions back to corporate earnings and possible interest rate moves.

The pound's rise was its eighth in a row, coming as bets firm on another rate hike next month, while yields on U.S. Treasuries were at their highest in over three weeks ahead of a flurry of top Fed speakers.

"It looks like may be willing to cooperate with the U.S. so that might be spurring risk appetite and the positive mood in markets," said

There were still some trade war noises being made though.

Stocks in closed near a one-year low, a U.S. move to ban American companies from selling components to Chinese hit tech stocks.

then said it would slap a hefty temporary tariff on U.S. sorghum imports after finding they had damaged the domestic industry. That set grain futures prices jumping.

Economic data showed the Chinese grew 6.8 percent in the first three months of the year, unchanged from the previous quarter.

jumped over 10 percent too, the strongest pace in four months, though other figures saw industrial output miss expectations and first-quarter fixed-asset investment growth also slowed.

"Underneath the stable GDP growth is quite rapid rebalancing from industrial, investment and old sectors to consumption, services and new sectors like tech. This is encouraging," said Robert Subbaraman, for excluding at Nomura in

STERLING AND EARNINGS

Commodity markets were still focused on the geopolitical situation in and the fallout from the U.S. sanctions on

Buoyed by growing expectations over tighter supply in the aftermath of sanctions on major Russian Rusal, aluminium prices jumped more than 1 percent to almost $2,500 a tonne to hit their highest since mid 2011.

accounts for 6-7 percent of global aluminium supply.

Oil steadied at $66.57 a barrel for U.S. crude and $71.66 a barrel for Brent having tumbled nearly 1.8 percent overnight as concerns over tensions eased.

In another sign of the returning risk appetite, the euro rose above $1.24 to a three-week high and debt outperformed better-rated peers.

"We have had a long enough period of extended volatility now that some of the more extended positions in risk assets have been reduced so that is also a positive," said Michael Metcalfe, at

On sterling, which was buying just over $1.43, he added that with so much good Brexit priced in recent weeks and rate hike bets growing, it was difficult to see how much further it could go.

It was curbed slightly too after data showed wage growth stalled last month despite the unemployment rate hitting a four-decade low.

U.S. Donald Trump's comments on Monday about and trying to devalue their currencies continued to weigh on the dollar, with investors believing that the wants a weaker currency.

Focus was also turning to first quarter results from the likes of and later.

companies are expected to report an 18.6 percent jump in first-quarter profit on average, the biggest rise in seven years, according to data.

(Additional Reporting by in Tokyo)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 17 2018. 14:38 IST
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