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Global Markets: Shares rise as risk appetite recovers, Goldman roars on Wall Street

Reuters  |  LONDON 

By Marc Jones

LONDON (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 near seven-year peak.

Chinese data that provided a bit of something for everyone had kept in check, but was going for its third rise in four days and Wall Street was pointing higher as latest earnings from and pleased traders.

More signs that is opening up its and a 'hotline' being set up between North and helped too, while steadier bond and gold markets showed investors were also gradually shifting attention away from tensions.

Some of the upward moves though, including gains for sterling, metals and Russia's rouble after had held off from fresh sanctions, had started to reverse as profit-taking kicked in.

"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

But there were still some trade war tensions being felt.

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

then said it would slap a hefty temporary tariff on U.S. sorghum imports, which sent grain futures prices jumping.

A plunge in German investor morale to its lowest in more than five years was also blamed on the trade war worries.

"This (German data) has been a solid leading indicator in the past to a downturn," said Saxo Bank's John Hardy, as the euro swiftly slid back below $1.2365.

China's economic data meanwhile showed its 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 slowed.

STERLING AND EARNINGS

The main S&P 500, Dow and Nasdaq stock futures were up over 0.5 percent ahead of the Wall Street restart as a 27 percent rise in Goldman Sachs' quarterly profit and strong earnings from and all boosted optimism over what is expected to be a strong earnings season.

Goldman's 23 percent increase in fixed income trading revenue was in sharp contrast to those of larger rivals JPMorgan Chase & Co, which reported a flat number, and Citigroup, where it fell 7 percent.

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.

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

Buoyed by growing expectations over tighter supply in the aftermath of sanctions on major Russian Rusal, aluminium prices jumped to almost $2,500 a tonne, their highest since mid 2011, before profit-taking reversed it all.

accounts for 6-7 percent of global aluminium supply.

Oil steadied at $66.26 a barrel for U.S. crude and $71.43 a barrel for Brent, having tumbled nearly 1.8 percent overnight as concerns over the eased.

In another sign of the returning risk appetite, the yen fell flat at 107 per dollar 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 by investors in recent weeks and rate hike bets growing, it was difficult to see how much further it could go.

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

"It was a warning shot at China and Russia about devaluation. China has devalued their currency in the past," then said during a television interview early on Tuesday. "He's watching it."

(Additional Reporting by in Tokyo; Editing by Catherine Evans)

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

First Published: Tue, April 17 2018. 18:25 IST
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