World stocks up as Trump appears to cushion Syria threat

LONDON: Global stock markets recovered their mojo on Thursday after US President Donald Trump appeared to take some of the sting out of threats to hit Syria with missiles.

"Never said when an attack on Syria would take place. Could be very soon or not so soon at all!" Trump tweeted.

European equities moved higher on relief that Trump seemed to have become more evasive, a move matched by US stocks at the opening bell in New York.

Frankfurt closed with a gain of 1.0 percent and the Dow was up 1.2 percent approaching midday in New York.

"A tweet-turnaround from Trump ... was the main driver of growth, lifting the majority of the markets out of the red and into the green," said Spreadex analyst Connor Campbell.

The US president had initially tweeted that "missiles will be coming", defying Russian warnings against a military strike.

Fawad Razaqzada at Forex.com added: "After stoking fears yesterday that an attack on Syria was imminent, today he appeared to backtrack slightly."

Nevertheless, markets remain anxious over the possibility of an uptick in violence in Syria involving the United States and Russia.

- Not so bullish -

Investors are already nervous over a potential trade war brewing between the US and China.

"With a possible trade war and conflict with Russia over Syria on the horizon, it's no wonder investors are not feeling particularly bullish right now," added OANDA analyst Craig Erlam.

"That said, I still believe the chances of either ... actually materialising are relatively slim which may stop the sell-off in equities getting out of hand."

Oil prices slipped back slightly as Trump appeared to cushion his threats, but remained underpinned by weeks of crude supply fears.

In its monthly report published Thursday, OPEC tied persistent crude strength to surging tensions in the Middle East and falling South American production.

"Oil prices climbed further to their highest level in several weeks as tension in the Middle East and the possibility of further drops in Venezuelan output helped offset the impact of growing US crude production," it said.

A weaker dollar also helped prices to resist gravity despite surging US crude production, while OPEC member states and Russia stuck to their 2016 pledge to pump less oil following a global glut that had sent prices crashing.

- Aiming for Norwegian? -

Away from geopolitical worries, there was eye-catching news in the aviation sector.

International Airlines Group (IAG), the owner of British Airways and Spanish carrier Iberia, is mulling a potential takeover of low-cost airline Norwegian Air Shuttle after building up a minority holding, it said Thursday.

Norwegian's shares shot 47 percent higher on the Oslo stock exchange.

"Investors questioned the merits of a possible merger but recognised it could be a boon for other budget airlines," said analyst Jasper Lawler at London Capital Group.

"If one assumes IAG will lift the fares and cut routes operated by Norwegian, then it reduces competition for the likes of EasyJet, Ryanair and Wizz Air," he added.

Shares in EasyJet were among the top gainers on the FTSE 100 in London, climbing 3.2 percent, while shares in IAG declined 1.1 percent.

Shares in Ryanair were up more than 2 percent in late trading in Dublin.

In Asia, markets fell Thursday as fears about the standoff over Syria arrested a rally fuelled by Xi Jinping's conciliatory trade message earlier in the week.

- Key figures around 1530 GMT -

New York - Dow: UP 1.2 percent at 24,488.19 points

London - FTSE 100: UP 0.02 percent at 7,258.34 (close)

Frankfurt - DAX 30: UP 1.0 percent at 12,415.01 (close)

Paris - CAC 40: UP 0.6 percent at 5,309.22 (close)

EURO STOXX 50: UP 0.7 percent at 3,443.30

Tokyo - Nikkei 225: DOWN 0.1 percent at 21,660.28 (close)

Hong Kong - Hang Seng: DOWN 0.2 percent at 30,831.28 (close)

Shanghai - Composite: DOWN 0.9 percent at 3,180.16 (close)

Euro/dollar: DOWN at $1.2314 from $1.2367 at 2100 GMT on Wednesday

Dollar/yen: UP at 107.38 yen from 106.79

Pound/dollar: UP at $1.4230 from $1.4177

Oil - Brent North Sea: DOWN 63 cents at $71.43 per barrel

Oil - West Texas Intermediate: DOWN 50 cents at $66.32