* Stocks surge in global relief rally as Mideast tension
eases
* Yen slides to two-week low
* First two-day fall for gold since November
By Herbert Lash
NEW YORK, Jan 9 (Reuters) - Crude oil prices slid and equity
markets around the world set new highs on Thursday as investors
took on greater risk in a relief rally after the United States
and Iran moved to defuse escalating tensions in the Middle East.
Gold prices retreated further from a near seven-year peak
scaled after Iran's retaliatory missile strike on military bases
housing U.S. troops in Iraq early on Wednesday in response to
Friday's U.S. drone strike that killed a top Iranian general and
raised fears of a greater regional conflict.
The safe-haven yen fell to more than a one-week low against
the dollar.
MSCI's gauge of equity indexes in 49 countries hit an
all-time high, as did the pan-regional STOXX 600 index in Europe
and the three major stock indexes on Wall Street. The benchmark
index in Australia set a record closing high and the main
Canadian stock index hit an all-time high.
U.S. President Donald Trump refrained from ordering more
military action and Iran's foreign minister said the missile
strikes had "concluded" Tehran's response.
Trump's decision helped to soothe markets and increase
demand for risk assets, said Brad Bechtel, managing director,
Jefferies in New York.
"Trump completely downplayed the idea of going to war with
Iran or even any sort of retaliatory measures," Bechtel said.
Neither side wants to further escalate tensions, said Bank
of Singapore currency strategist Moh Siong Sim in Singapore.
"All is well - so says Trump! That is the mood today," Sim
said.
MSCI's all-country world index .MIWD00000PUS gained 0.61%,
while the STOXX 600 index .STOXX rose 0.31%. The MSCI emerging
markets index
Germany's trade-sensitive DAX .GDAXI jumped 1.3%, helped
by data showing better-than-expected industrial output in
November that dispelled lingering worries about a recession in
Europe's economic powerhouse. On Wall Street, the Dow Jones Industrial Average .DJI rose
184.95 points, or 0.64%, to 28,930.04. The S&P 500 .SPX gained
17.09 points, or 0.53%, to 3,270.14 and the Nasdaq Composite
.IXIC added 58.12 points, or 0.64%, to 9,187.36.
Stocks also got a boost from China's commerce ministry
saying Vice Premier Liu He will sign a long-awaited Phase 1
trade deal in Washington next week. Crude prices slid as the market shifted focus toward a
rising inventory of U.S. crude stocks as prices receded to
pre-crisis levels of mid-December. Oil prices later pared losses
to trade near break-even.
Brent crude futures LCOc1 fell 7 cents to settle at $65.37
a barrel, while West Texas Intermediate CLc1 settled down 5
cents at $59.56 after tumbling nearly 5% on Wednesday.
Crude oil stocks USOILC=ECI were up 1.2 million barrels in
the week ended Jan. 3 at 431.1 million barrels, the Energy
Information Administration said on Wednesday.
The yen, seen as a safe haven in times of geopolitical
turmoil because of its deep liquidity as well as Japan's current
account surplus, quickly reversed gains made after the Iranian
missile strike.
Another safe currency, the Swiss franc, also fell against
both the dollar and the euro. EURCHF= .
The yen JPY= weakened 0.35% versus the greenback at 109.53
per dollar. The dollar index .DXY , tracking the unit against
six peers, rose 0.14%, with the euro EUR= up 0.02% to $1.1105.
Greater risk appetite was also evident in emerging markets.
China's trade-exposed yuan CNY= reached a five-month high of
6.9281 per dollar, while South Africa's rand ZAR= and Turkey's
lira TRY= , which had been buffeted this week, rebounded.
EMRG/FRX
U.S. Treasury yields fell after strong demand at a $16
billion auction of 30-year bonds drove their price higher. The
benchmark 10-year note US10YT=RR rose 7/32 in price to yield
1.8493%.
U.S. gold futures GCv1 were down 0.4% at $1,551.73.
Mideast tensions ease https://tmsnrt.rs/305Wf0t
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