HONG KONG: Shares advanced on Wednesday in Europe and Asia as oil prices fell back slightly despite a barrage of attacks by Iran on its Gulf neighbours.
US futures rose 0.5 per cent after a session of moderate gains on Wall Street ahead of the Federal Reserve's decision on interest rates later in the day. With higher oil prices feeding into other inflation, the Fed is widely expected to keep rates on hold.
Worries over global oil and gas supplies and rising prices are still clouding global markets, though Brent crude, the international standard, fell slightly to USD 103.14 per barrel, down from above USD 106 on Monday.
US benchmark crude fell 1.6 per cent to USD 94.67 per barrel.
Iran lashed out Wednesday with multiple attacks on its Gulf neighbours and Israel following the killing of one of its top leaders in an airstrike, using some of its latest missiles to evade air defences and killing two near Tel Aviv.
But markets seem to have taken the latest escalations in stride.
Germany's DAX rose 0.7 per cent to 23,899.71 and the CAC 40 in Paris picked up 0.9 per cent to 8,045.19. Britain's FTSE 100 edged 0.2 per cent higher to 10,427.12.
During Asian trading, Tokyo's Nikkei 225 gained 2.9 per cent to 55,239.40 after the government reported exports were higher than expected in February.
In South Korea, the Kospi jumped 5 per cent to 5,925.03.
Lower oil prices are a boon for big oil importers like Japan and South Korea.
Hong Kong's Hang Seng reversed early losses, surging 0.6 per cent to 26,025.42, while the Shanghai Composite index also rebounded, gaining 0.3 per cent to 4,062.98.
Australia's S and P/ASX 200 climbed 0.3 per cent to 8,640.60.
Taiwan's Taiex added 1.5 per cent and India's Sensex advanced 1 per cent.
Global oil flows remain largely constrained, ING Bank analysts Warren Patterson and Ewa Manthey wrote in a research note on Wednesday, even as hopes were growing that Iran might be allowing more vessels through the Strait of Hormuz, a key waterway for global oil and gas transport.
Roughly a fifth of the world's crude oil passes through the strait, which has been largely closed as Iran blocks ships linked to the US, Israel and their allies.
On Tuesday, US stocks held steadier as the S and P 500 rose 0.3 per cent and the Dow Jones Industrial Average edged 0.1 per cent higher. The Nasdaq composite added 0.5 per cent.
In other dealings early Wednesday, the US dollar fell to 158.96 Japanese yen from 159.01 yen. The euro fell to USD 1.1536 from USD 1.1542.