LONDON: World stock markets were higher Friday after US President Donald Trump put off a decision about military strikes in Syria, giving investor nerves a welcome break.
Sentiment is Asia was boosted also by hopes the US could rejoin a massive Pacific-wide free-trade pact.
But analysts warned that the market's nervousness could flare up at any moment, and probably would.
"Traders remain cautious heading into the weekend," said Craig Erlam at OANDA.
- 'Somewhat gradual' -
"Given the backdrop of a trade conflict with China and rising tensions with Russia over Syria, any rallies may be somewhat gradual," he said.
Wall Street was up at the opening bell, posting gains in line with continental European exchanges.
But London's benchmark FTSE 100 index struggled to keep up with its peers owing to a strong pound weighing on the share prices of multinationals earning large amounts in other currencies.
"With the pound hitting a two-month high against the dollar and ten-month high against the euro, it comes as no surprise that the internationally focused FTSE 100 suffers," noted Joshua Mahony, market analyst at IG trading group.
Trump on Wednesday sent shudders across trading floors when he warned "missiles will be coming" to Syria in response to an alleged chemical attack by the Russia-backed regime, fuelling fears of a stand-off between the major powers.
But he tempered the rhetoric a day later suggesting he might hold off on an imminent strike while he holds talks with France and Britain on how to deal with the crisis.
As investors digested the remarks, it emerged Trump had directed senior aides to explore rejoining the Trans-Pacific Partnership (TPP), which he left on becoming president, calling it a US jobs killer.
The U-turn came as he suggested the US and China might not eventually impose tariffs on each other's goods, despite recent tit-for-tat warnings over hundreds of billions of dollars of trade.
- Back from brink, again -
"Remarkable. That's the only thing I can really say in the past 36 hours or so about the change in tone that seems to be emanating from the president and the White House," Greg McKenna, chief market strategist at AxiTrader, said Friday.
"President Trump is walking back from the brink on so many fronts it's making my head spin," he added.
The oil price rose again, confirming its much stronger trend in recent sessions.
The IEA said Friday fears of fresh escalation in Syria's war coupled with compliance with a pledge by the OPEC cartel and Russia to limit production were firmly underpinning oil prices.
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