Asian shares recover as Mideast tension alleviates, oil soars

SINGAPORE- Asian stocks bounced from inactivity on Thursday and oil prices inched higher as the United States and Iran both signaled resolution rather than to pursue further conflict.

US President Donald Trump released a sanction overnight as retaliation to Iran’s recent attack against US troops. Iran remained silent and had given no indications of further strike after the killing of one of its military commanders on Jan. 03.

MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 1% together with Hong Kong’s Hang Seng and Shanghai blue chip index, completely recuperating from Wednesday’s setbacks.

Japan’s Nikkei raked in 1.8% gains, hitting its highest record for this year. Australian shares edged 1%, not far from its December’s positive record.

“I think today is a bit of a relief rally,” said Shane Oliver, Chief Economist of AMP Capital.

“Yesterday, investors were fearing the worst, that this was the escalation now underway. The news overnight has been more along the lines that Iran pulled its punches and Trump is toning things down,” he said, “which is seen by investors as substantially reducing the risk of a war.”

Investors were inactive with yen as it hit a two-week low of 109.25 per dollar from its recent consecutive peaks.

Oil was traded not far from how it was before the Killing of Iran’s top commander, Qassem Soleimani. Such heightened fear of a possible conflict between the US and Iran.

Brent futures prices recovered from low ground as it reached $65.84 value per barrel.

Gold clocked in earnings last Wednesday but did not beat its session before Soleimani’s death which is a hint of a heavy market sentiment.