The rally in equities accelerated on Friday, following comments by Jerome Powel, the Fed Chair.
Powell told the American Economic Association that the Fed is not on a preset path of interest rate hikes and that it will be sensitive to the downside risks the markets are pricing in.
“Markets are scaling back some of their extreme nervousness after Powell effectively did some easing, with his words. But short-covering could run its course soon,” Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Reuters.
“Hopes on U.S.-China trade talks are helping. Some sort of deals are likely to increase Chinese imports of natural gas, soybeans and so on from the U.S. Yet, it should be hard to resolve more structural issues such as intellectual property rights,” he added.
Middle East markets
Stock markets in the Middle East ended the day mixed on Tuesday.
Saudi Arabia’s index edged up 0.1 percent, with Jabal Omar Development rising 2.5 percent and Banque Saudi Fransi hiking 2 percent. Nama Chemicals added 3.7 percent to end as the top gainer on the index.
Dubai's index fell 0.2 percent after rising for three straight sessions. Dubai's largest listed developer Emaar Properties dipped 1.3 percent, while its unit Emaar Development lost 2.8 percent.
Abu Dhabi’s index was down 0.2 percent, with Aldar Properties dropping 1.9 percent and Dana Gas sliding 1 percent.
Qatar's index fell 0.3 percent as Qatar Islamic Bank lost 1.7 percent and Qatar National Bank was down 1 percent.
The Egyptian blue-chip index EGX30 rose 0.5 percent, with Sidi Kerir Petrochemicals gaining 4.6 percent and El Sewedy Electric adding 5.6 percent.
Kuwait, Oman and Bahrain’s indices were mainly flat.
Oil prices rose on Wednesday as global markets surged on hopes that the U.S. and China will agree on a trade deal.
U.S. West Texas Intermediate (WTI) crude oil futures were at $50.29 per barrel as at 0131, up 51 cents, or 1 percent from their last settlement.
International Brent crude futures were up 42 cents, or 0.7 percent, at $59.14 per barrel.
“Crude continues to extend gains as early reports from Beijing regarding trade negotiations are fueling optimism around successful trade talks between the U.S. and China,” Stephen Innes, head of trading for Asia/Pacific at futures brokerage Oanda in Singapore, told Reuters.
“After a dreadful December for risk markets, Crude oil continues to catch a positive vibe,” he added.
The dollar rebounded on Tuesday after drops in the previous sessions when analysts bet that the U.S. Federal Reserve would put its policy tightening on pause in 2019.
The dollar index, which measures the greenback against a basket of six major currencies, rose 0.3 percent.
Gold prices were mainly steady on Wednesday.
Spot gold was little changed at $1,285.62 by 0041 GMT.
U.S. gold futures were also steady at $1,286.70 per ounce.
(Reporting by Gerard Aoun; Editing by Mily Chakrabarty)
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