World shares gain on back of Wall Street rally as war shock to markets fades

World shares advanced Tuesday after U.S. stocks rallied as investors unwound some of last week’s moves driven by worries about war in the Middle East, AP reported.

Oil prices slipped and U.S. futures also edged lower.

Markets are awaiting China’s latest economic growth figures, due Wednesday. Economists are forecasting that annual growth dropped to under 5% in July-September from 6.3% in the previous quarter.

A weaker Chinese economy is a drag on regional and global trade and manufacturing, slowing the global recovery from the pandemic.

In early European trading, Germany’s DAX was up 0.1% at 15,258.33 and the CAC 40 in Paris also gained 0.1% to 7,031.52. Britain’s FTSE 100 rose 0.3% to 7,650.27.

The futures for the S&P 500 and Dow industrials were up less than 0.1%.

In Asia, Tokyo’s Nikkei 225 gained 1.2% to 32,040.29 and the Hang Seng in Hong Kong added 0.7% to 17,771.08.

The Shanghai Composite index gained 0.3% to 3,083.50. In Australia, the S&P/ASX 200 climbed 0.5% to 7,056.10. India’s Sensex advanced 0.6% and the SET in Thailand rose 0.5%.

Markets appeared to have recovered, for the moment, even as Israel was preparing for a likely ground offensive into Gaza and fears deepened that the conflict could spread along Israel’s border with Lebanon.

On Monday on Wall Street, the S&P 500 climbed 1.1% for its best day since the Oct. 7 surprise attack on Israel by Hamas. It closed at 4,373.63. The Dow rose 0.9% to 33,984.54 and the Nasdaq composite added 1.2% to 13,567.98.

“The risk-off tone that permeated markets a few days ago seems to be dissipating thanks to a lot of shuttle diplomacy by (U.S. Secretary of State Antony) Blinken and others in the region,” Robert Carnell and Nicholas Mapa of ING Economics said in a commentary. “However, all of this is before Israel mounts its ground offensive in Gaza, and that could turn sentiment rapidly sour again.”