US stocks end at records as Iran worries ease

Investors have been cheered by a toning down of rhetoric between the US and Iran, with Donald Trump saying Tehran appeared to be stepping back (AFP Photo/SAUL LOEB)

Wall Street stocks jumped to fresh records on Thursday following a buoyant session for global equities as investors took heart that a US-Iran conflict is not escalating and a trade deal with China is likely to be signed.

All three major US indices finished at all-time highs, with the broad-based S&P 500 winning 0.7 percent as haven investments such as gold and the yen faltered.

The gains in New York marked a second straight session of advances on rising confidence about the US-Iran clash following statements Wednesday by US President Donald Trump and Iranian officials.

"Assuming Iran-US tensions continue to simmer rather than boil, markets are likely to refocus on the global growth outlook and on trade, with the interim US-China trade deal expected to be signed on 15 January," said National Australia Bank's Tapas Strickland.

Further boosting sentiment, China said that Vice Premier Liu He will travel to Washington next week to sign the "phase one" deal with the United States that has lowered trade tensions between the world's two biggest economies.

The advance in the United States was broad-based, with the technology, financial and energy sectors registering especially large gains.

"Markets have learned not to overreact to developments in the Middle East," Gregori Volokhine of Meeschaert Financial Services told AFP.

"What animates investors is fear of missing out on a higher stock market. Nobody wants to be the first sell or take profits."

Frankfurt led European gains as the DAX closed up 1.3 percent -- Lufthansa flying high with a four percent gain -- as London and Paris, which at one time brushed a 13-year high, limited gains to around a quarter of one percent.

Tokyo and Hong Kong had earlier added around two percent and Shanghai 0.9 percent.

But the rush to riskier investments saw gold, seen as a haven in times of unrest, pull back, having earlier broken $1,600 per ounce for the first time in seven years.

The lowering of tensions will allow traders to turn their attention to the release on Friday of US jobs data, which will provide the latest snapshot of the world's number one economy, with recent figures indicating it remains robust.

Also in focus is the upcoming earnings season, which kicks off this month.

- Pound falls -

In London meanwhile, the pound slid after Bank of England governor Mark Carney said Britain's economic recovery was "not assured" despite a drop in Brexit uncertainties.

"Although the risk of a semi-hard Brexit at the end of 2020 will continue to hang over the UK, the sweeping 12 December election win for (Prime Minister Boris) Johnson and his Conservative Party has brought much of the damaging uncertainty of recent years to an end," said Kallum Pickering, senior economist with Berenberg.

He forecast a real growth pickup from 1.3 percent in 2019 to 1.8 this year and 2.1 in 2021.

- Key figures at 2220 GMT -

New York - Dow: UP 0.7 percent at 28,956.90 (close)

New York - S&P 500: UP 0.7 percent at 3,274.70 (close)

New York - Nasdaq: UP 0.8 percent at 9,203.43 (close)

London - FTSE 100: UP 0.3 percent at 7,598.12 (close)

Frankfurt - DAX 30: UP 1.3 percent at 13,495.06 (close)

Paris - CAC 40: UP 0.2 percent at 6,042.55 (close)

EURO STOXX 50: UP 0.6 percent at 3,795.88 (close)

Tokyo - Nikkei 225: UP 2.3 percent at 23,739.87 (close)

Hong Kong - Hang Seng: 1.7 percent at 28,561.00 (close)

Shanghai - Composite: UP 0.9 percent at 3,094.88 (close)

Pound/dollar: DOWN at $1.3064 from $1.3097 at 2200 GMT

Euro/pound: UP at 84.98 pence from 84.80 pence

Euro/dollar: FLAT at $1.1105

Dollar/yen: UP at 109.51 from 109.12 yen

Brent Crude: DOWN 0.1 percent at $65.37 per barrel

West Texas Intermediate: FLAT at $59.56 per barrel

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