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Return of risk appetite boosts global stocks, commodities

Reuters  |  LONDON 

By Ritvik Carvalho

(Reuters) - World stocks and commodities rose on Friday, with stocks set to post their biggest weekly gain in over a month as investors seemed to shrug off uncertainty over tension in the and the prospect of a global trade war.

Global stock markets have had a whipsaw week, largely fuelled by U.S. Donald Trump's tendency to change his mind over key policy and political issues.

The Index, which tracks shares in 47 countries was up nearly 0.1 percent on the day. It has gained nearly 2 percent this week, its best weekly showing since March.

-European hit new one-month highs, with the pan-European index on track for its third straight week of gains, its longest winning streak since January. The beginnings of European companies' first-quarter results were largely positive, though misses were badly punished.

Earlier in Asia, MSCI's broadest index of shares outside was up a slim 0.1 percent, still up about 2 percent on the week.

Overall, Friday's performance in stocks seemed to suggest investors were relieved at apparent suggestions from Trump that a military strike on may not be imminent. However, the threat of a strike remained after Washington's earlier warnings against the for what is said was a on its civilians.

"It would be naïve in the extreme to suggest that the events of the last 24 hours means that the threat of an escalation of geopolitical factors has passed," said Michael Hewson, at in

"But for now while the background noise is driving the short-term direction as markets gyrate higher and lower, recent price action might suggest that we could look to head towards the upper end of the trading range in the coming days, particularly if U.S. earnings come in ahead of expectations."

The earnings season begins in earnest on Friday with reports from JPMorgan Chase & Co, and Wall Street was set to open higher.

Analysts expect quarterly profit for companies to rise 18.4 percent from a year ago, in what would be the biggest gain in seven years, according to I/B/E/S.

RISK APPETITE

Investors had other reasons to fret, however.

Mixed data from showed March exports unexpectedly fell 2.7 percent from a year earlier while imports jumped more than forecast.

While the figures pointed to robust demand from the world's top consumer of crude, copper and iron ore, they left the country with a rare trade deficit of $4.98 billion for the month, the first since last February.

Trade tensions also were not far from the surface, with analysts at Citi noting prolonged uncertainty will likely hurt open Asian economies such as Taiwan, and

In the most recent change of tack, Trump Thursday asked his advisers to look at re-joining the Trans Pacific Partnership, a multinational trade pact the from early last year.

But he later tweeted that the would only join the TPP if the deal were substantially better than the one offered to former

The return of risk appetite also played out in the currencies and commodities complex.

The dollar hit a seven-week high against the Japanese yen. The yen tends to benefit from geopolitical uncertainty and risk aversion.

The Australian dollar, considered a proxy for risk sentiment, rose to a four-week high against its U.S. counterpart.

The dollar index, which measures the greenback against a basket of six major currencies, was up 0.1 percent.

Aluminium hit a six-year high on Friday and remained on track for the biggest weekly gain on record after the imposed sanctions on Russia's UC Rusal, the world's second-biggest of the

Spot gold was up 0.2 percent at $1,337.04 an ounce and was set for a weekly gain of almost 0.4 percent.

edged lower, but were set for their biggest weekly gain since last July.

Brent crude futures fell 0.4 percent to $71.75 per barrel. U.S. WTI crude futures fell 0.3 percent to $66.84.

(Reporting by Ritvik Carvalho; additional reporting by in TOKYO and Swati Pandey in SYDNEY; Editing by Matthew Mpoke Bigg)

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

First Published: Fri, April 13 2018. 17:05 IST
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