The toning down of rhetoric from Donald Trump and Tehran following an Iranian missile attack on US assets in Iraq soothed concerns about a possible conflict in the Middle East and lit a fire under global equities on Thursday.
That has allowed dealers to resume their buying spree that had characterised business for the past few weeks, cheered by China and the United States reaching a trade deal, central banks easing monetary policy and data pointing to an improved global outlook.
“Even though we are hitting close to or near all-time highs, we still feel pretty excited about this market,” Invesco strategist Timothy Horsburgh told Bloomberg TV.
“What we’ve seen over the past couple of days with some of this relief rally, this is indicative of a market that’s wanted to go higher for a while now as a result of better fundamentals and a little bit of optimism around reaccelerating growth here in the US.”
Wall Street’s three main indexes racked up fresh records and Asia broadly followed suit, though the gains were light.
Tokyo ended 0.5 percent up, Seoul added 0.9 percent and Sydney jumped 0.8 percent, while Singapore put on 0.2 percent, Taipei jumped 0.5 percent and Mumbai climbed 0.7 percent. Wellington, Bangkok and Jakarta also rose.
But Shanghai dropped 0.1 percent, while Manila lost 0.6 percent.
Oil falls further
There appeared to be little negative market reaction to claims by Canada that Iran shot down an airliner in Tehran this week, killing 176 people.
Investors are now looking to the release later in the day of US jobs figures for a better idea about the state of the world’s top economy, while next week sees China and the US put pen to paper on their mini trade deal.
The “critical payroll data comes as a most welcome distraction and will provide an essential update on the pace of US job gains”, said Stephen Innes at AxiTrader.
“With US economic growth mostly dependent on the consumer, a healthy labour market is crucial to any constructive ‘risk-on’ narrative”.
“With the market backdrop remaining supportive –- namely, improving macro, central bank easing, and receding… risk around trade, Brexit, and the Middle East, the path of least resistance remains up.”
Oil prices dipped, with the sharp gains enjoyed in the wake of the US assassination of Iran’s top general last week being wiped out. The commodity is now below levels seen before the killing early last Friday.
Innes added that with “the chance of a proxy or rogue threat of disruption to physical supply still elevated, we could see a floor start to build around current (price) levels”.
“At the same time, traders will now turn the focus back on the relatively pedestrian views around trade and data, which remain positive for oil.”
Key figures at 0710 GMT
Tokyo – Nikkei 225: UP 0.5 percent at 23,850.57 (close)
Hong Kong – Hang Seng: UP 0.2 percent at 28,609.63
Shanghai – Composite: DOWN 0.1 percent at 3,092.29 (close)
Pound/dollar: UP at $1.3083 from $1.3064 at 2200 GMT
Euro/pound: DOWN at 84.90 pence from 84.98 pence
Euro/dollar: UP at $1.1108 at $1.1105
Dollar/yen: UP at 109.57 yen from 109.51 yen
Brent Crude: DOWN eight cents at $65.29 per barrel
West Texas Intermediate: DOWN 10 cents at $59.46 per barrel
New York – Dow: UP 0.7 percent at 28,956.90 (close)
London – FTSE 100: UP 0.3 percent at 7,598.12 (close