* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Nikkei up 1.3%, futures point to firm European start
* Oil retreats on doubts Iran would disrupt supplies
* Safe-havens pull back, with yen and gold easing
By Wayne Cole
SYDNEY, Jan 7 (Reuters) - Asian shares rebounded on Tuesday
as investors' reassessed the risk of an all-out conflict between
the United States and Iran, while Wall Street battled back to
the black as tech stocks climbed.
Oil surrendered hefty gains as some speculated Iran would be
unlikely to strike against the U.S. in a way that would disrupt
supplies, and its own crude exports. O/R
"Oil traders have been unwinding their hedges, thinking that
Iran's economic hardships would deter an attack on any oil
infrastructure in that it would likely freeze out any existing
Iranian exports and put the economy into an even deeper hole,"
said Stephen Innes, chief Asia market strategist at AxiTrader.
Brent crude LCOc1 futures fell 86 cents to $68.05 a
barrel, having been as high as $70.74 on Monday, while U.S.
crude CLc1 dropped 77 cents to $62.50.
Gold XAU= also retreated to $1,558.67 an ounce, after
scaling a near seven-year peak of $1,582.59 overnight.
Equities went the other way as MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS added 0.7%,
recouping almost all of Monday's losses.
Japan's Nikkei .N225 rallied 1.4% and Shanghai blue chips
.CSI300 0.5%. E-Minis for the S&P 500 ESc1 firmed 0.2%,
while EUROSTOXX 50 futures STXEc1 rose 0.4% and FTSE futures
FFIc1 0.6%.
Asian shares fell sharply on Monday as Iran and the United
States traded threats after an U.S. air strike on Jan. 3 killed
a top Iranian commander.
The mood calmed a little as the session passed with no new
aggression.
Instead there was much confusion when the U.S. military
wrote to Iraq on Monday saying it would pull out of the country,
a letter seen by Reuters showed. Yet U.S. Defense Secretary Mark Esper told Pentagon
reporters that no decision had been made and the military said
the letter was only a poorly worded draft. Wall Street chose to hope for the best and the Dow .DJI
rose 0.24%, while the S&P 500 .SPX gained 0.35% and the Nasdaq
.IXIC 0.56%.
Surveys of service sectors out overnight showed an
improvement in the United States, UK and EU, stirring
speculation the closely-watched ISM measure of U.S. services due
later Tuesday will also show strength.
"We think the longest U.S. expansion on record still has
plenty of legs," said Tom Porcelli, chief U.S. economist at RBC
Capital Markets. "To be sure, Iran adds an additional layer of
complexity."
"But while the risk of conflict has increased, the reality
is this is likely to be limited to proxy skirmishes," he argued.
"The risk of a "hot" conflict seems low as Iran is unlikely to
respond in such a way that risks a significant escalation from
the United States."
The calmer mood saw the yen lose much of its safe-haven
gains, with the dollar bouncing to 108.48 yen JPY= from a low
of 107.75 hit on Monday.
The euro edged up to $1.1192 EUR= , but faces stiff chart
resistance around $1.1240, while sterling made gains to $1.3173
GBP= on better economic data at home.
Against a basket of currencies, the dollar had drifted off
to 97.661 .DXY but stayed above the recent six-month trough of
96.355.
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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(Editing by Shri Navaratnam and Christian Schmollinger)