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Stocks, commodities regain footing after dropping on trade worries

Reuters  |  NEW YORK 

By Hilary Russ

NEW YORK (Reuters) - Stock markets around the world bounced back on Thursday, with U.S. gains led by merger activity and earnings optimism that offset concerns over an escalating U.S. trade battle with China.

Metals also rebounded, with bargain-hunting investors scrambling to buy, while flailed around after clawing back big losses from the day before.

Stocks on Wall Street got a boost from technology and industrial shares. jumped 18.1 percent after chipmaker announced a surprise $18.9 billion deal to buy the U.S. company.

There was also some relief for markets as U.S. came out of a meeting of the NATO military alliance in with a positive assessment after a string of earlier barbs.

"We had a fantastic meeting at the end," Trump told reporters. "Very unified, very strong, no problem."

The <.DJI> rose 196.76 points, or 0.8 percent, to 24,897.21, the <.SPX> gained 20.69 points, or 0.75 percent, to 2,794.71 and the <.IXIC> added 97.17 points, or 1.26 percent, to 7,813.78.

"While markets have typically reacted negatively to any escalation on trade, the overall impact has been relatively modest under the circumstances which suggests investors are far from panic mode right now," Craig Erlam, senior market analyst, said in a note.

The pan-European index <.FTEU3> rose 0.78 percent and MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.52 percent.

Positive U.S. jobless data on Wednesday provided a market boost, with labour market conditions remaining robust in early July.

In addition, a consumer prices report indicated the underlying trend continued to point to a steady buildup of pressure that could keep the Federal Reserve on a path of gradual interest rate hikes.

The data also boosted the U.S. dollar, which rose to a six-month high against the .

In part, currency investors may see positive implications for the dollar from a trade war, as the would be better equipped to weather a slowdown in trade than other major economies.

The weakened 0.40 percent versus the greenback at 112.48 per dollar.

Oil had a wild ride since the prior session, when prices had their biggest one-day fall in two years. But they steadied on Thursday despite a warning from the International Energy Agency (IEA) that the world's "might be stretched to the limit" due to production losses.

Brent crude futures settled at $74.45 a barrel, up $1.05 or 1.43 percent. U.S. settled 5 cents, or 0.07 percent, lower at $70.33.

Metals prices rebounded after a meltdown following Trump's threats for 10 percent tariffs on another $200 billion of Chinese goods.

Nickel touched its highest in a week as investors scrambled to buy at the cheaper prices.

Copper rose 1.14 percent to $6,215.00 a tonne.

(Additional reporting by and in Bengaluru; Lucia Mutikani in Washington; Kate Duguid and Jessica Resnick-Ault in New York; Editing by and Nick Zieminski)

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

First Published: Fri, July 13 2018. 00:50 IST