BANGKOK: European shares slipped Thursday despite rebounds in Asia and on Wall Street, as Iran launched new attacks and threatened the US.
US futures also fell back, with the contract for the Dow Jones Industrial Average losing 0.5 per cent, while that for the S&P 500 shed 0.3 per cent.
Uncertainty about the war in the Middle East has been rattling financial markets, with most taking their cues from what the price of oil is doing.
“Yesterday's bounce in risk assets already looks less like a turning point and more like a classic relief rally in a market that briefly inhaled before realising the room was still on fire,” Stephen Innes of SPI Asset Management said in a commentary.
Crude prices climbed early Thursday, with Brent, the international standard, gaining 3.2 per cent to USD 84 per barrel. US benchmark crude jumped 3.7 per cent to USD 77.37 per barrel.
The war brought a fresh wave of attacks by Iran on Israeli and American bases. Iran warned the United States would “bitterly regret” torpedoing an Iranian warship in the Indian Ocean and a religious leader called for “Trump's blood,” while Israel said it had begun a “large-scale” attack on Tehran.
In Germany, the DAX lost 0.5 per cent to 24,087.63, while the CAC 40 in Paris lost 0.6 per cent to 8,118.25. Britain's FTSE 100 edged 0.2 per cent lower, to 10,547.82.
In Asian trading, South Korea's Kospi took back much of its historic losses from a day earlier, jumping 9.6 per cent to 5,583.90. It had gained as much as 12 per cent earlier in the day as investors hunted bargains, triggering temporary trading halts.
The government announced emergency measures for the economy after the benchmark fell by the most ever in a single day on Wednesday. President Lee Jae Myung urged officials to activate an emergency financial package worth 100 trillion won (USD 68.5 billion) aimed at calming market volatility.
Tokyo's Nikkei 225 index gave back some early gains, closing 1.9 per cent higher at 55,278.06.
In Hong Kong, the Hang Seng climbed 0.3 per cent to 25,321.34 after Chinese Premier Li Qiang opened the annual session of the National People's Congress with a report that set the annual target for economic growth this year at 4.5 per cent to 5 per cent. A draft budget put the increase in military spending at 7 per cent, down from 7.2 per cent in recent years.
The government pledged to support the sluggish domestic economy and spur more consumer spending, but did not announce any major new stimulus.
The Shanghai Composite index gained 0.6 per cent to 4,108.57.
In Australia, the S&P/ASX 200 rose 0.4 per cent to 8,940.30, while New Zealand's benchmark rose 0.6 per cent.
Taiwan's main share index gained 2.6 per cent.
On Wednesday, US stocks got a boost as oil prices steadied, albeit temporarily. A report that said growth for US businesses in the real estate, finance and other services industries accelerated last month at the fastest pace since the summer of 2022 also helped.
The S&P 500 rose 0.8 per cent, erasing much of its losses since the war with Iran began. The Dow industrials added 0.5 per cent and the Nasdaq composite climbed 1.3 per cent.
Another report suggested US private sector employers stepped up hiring last month, a potentially hopeful signal for a more comprehensive US government Friday about the overall job market.
Investors are worried over how long the war with Iran could last, how high inflation may go because of more expensive oil and how much damage that might do to corporate profits.
Wall Street also got a lift from Big Tech stocks as Amazon rose 3.9 per cent and Nvidia added 1.7 per cent. Because they're among the biggest stocks in the US market in terms of total value, their movements carry more weight on the S&P 500.
Wednesday's strong reports on the economy were welcome news for the Federal Reserve, whose job it is to keep the US job market healthy and inflation low. The Fed's job has become more difficult because of the jump in oil prices, which is pushing upward on already high inflation.
In other dealings early Thursday, the US dollar rose to 157.22 Japanese yen from 157.07 yen. The euro fell to USD 1.1596 from USD 1.1636.
The dollar has advanced against other currencies partly because the US is viewed as facing less risk from the war than other countries, analysts said.
“When the world becomes less certain, capital gravitates toward the deepest pool of liquidity available,” Innes said, adding that the dollar “remains the market's preferred storm shelter.”