On Wall Street on Tuesday, the S&P 500 gained 1.30 percent and MSCI's broad gauge of stocks across the world rose 0.50 percent.
“Global financial markets have been shaken by concerns that escalating U.S.-China trade tensions, which now has triggered a currency war, would cool the world economy substantially,” Masahiro Fukuda, investment director at Fidelity told Reuters.
“While we cannot rule out the possibility of political negotiations leading to unexpected outcomes, we think it is unnecessary to worry about recession as various fiscal and monetary stimulus should support the economy of the two courtiers,” he said.
Oil prices also steadied on Wednesday, taking cues from global stocks.
International benchmark Brent crude futures were at $58.97 a barrel by 0221 GMT, up 3 cents, or 0.05 percent, from their previous settlement and trading near seven-month lows.
Meanwhile West Texas Intermediate (WTI) crude futures were down 8 cents, or 0.15 percent, from their last close to $53.56 per barrel.
“It’s not a huge move...What we’re looking at is steady, reflecting concerns among traders whether or not the trade dispute development is fully priced in,” Michael McCarthy, chief market strategist at CMC Markets told Reuters.
Elsewhere, data indicating a larger-than-expected drop in US crude stocks offered some support to oil prices.
Middle East markets
Most stock markets in the region dropped on Tuesday, as trade tensions between the US and China weighed on investor sentiment globally.
Saudi Arabia’s index fell 0.8 percent. National Commercial Bank lost 3 percent, while Saudi British Bank (SABB) dipped 3.4 percent after it reported a second-quarter loss.
Dubai's index edged down 0.1 percent with Emirates NBD shedding 0.9 percent, while Emaar Development decreased 3.1 percent after it reported a 24 percent drop in first-half net profit.
In Abu Dhabi, the index was mainly flat. Abu Dhabi Commercial Bank shed 1.6 percent while Aldar Properties closed 4.1 percent higher.
Qatar’s index fell 1.5 percent. Mesaieed Petrochemical Holding declined 5 percent and Barwa Real Estate dipped 4.4 percent.
Egypt's blue-chip index rose 0.4 percent with Egypt Kuwait Holding gaining 3.2 percent.
Kuwait’s premier market index edged 0.3 percent lower while Bahrain’s index was flat and Oman’s index gained 0.4 percent.
The dollar index .DXY, which measures the greenback against a basket of six major currencies, rose 0.37 percent early on Wednesday to 97.581.
Gold prices also rose on Wednesday.
Spot gold gained 0.2 percent to $1,476.91 per ounce as of 0114 GMT.
US gold futures rose 0.2 percent to $1,487.60 an ounce.
(Reporting by Gerard Aoun; Editing by Seban Scaria)
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