Asian stocks rise, echoing a rally on Wall Street as oil prices fall back to around $90

TOKYO (AP) — World stocks rebounded Tuesday from sharp declines the previous day, as global investors bet that the war with Iran might not last too long.

But the gains were well below losses on Monday, when oil prices approached $120 a barrel before falling back to around $90. US stocks were expected to rise, with Dow futures rising 0.4% to 47,970.00. S&P 500 futures rose 0.4% to 6,830.75.

Helping to calm investor fears, US President Donald Trump told News that he believes “the war is virtually complete.” He also made other comments that appeared to threaten to escalate action against Iran if it makes any “attempt to stop the world’s oil supply.”

AP Photo/Ahn Young-joon

France’s CAC 40 added 1.9% in early trading to 54,248.39, while Germany’s DAX rose 2.4% to 23,966.97. Britain’s FTSE 100 gained 1.6% to 10,410.08.

In Asia, Tokyo’s benchmark Nikkei 225 index added 2.9% to finish at 54,248.39 after the government released revised economic data showing Japan’s economy grew slightly faster than initially estimated in the final quarter of last year, boosted by strong business investments.

The economy expanded at an annual rate of 1.3%. The initial estimate was a much weaker 0.2%.

“Today is the rally, the obviously positive comments from President Trump overnight, we are starting to see the light at the end of the tunnel for war,” said Neil Newman, managing director and head of strategy at Astris Advisory Japan.

“So volatility will still be with us, but things certainly look a lot better today,” he said.

Australia’s S&P/ASX 200 gained 1.1% to 8,692.60. South Korea’s Kospi rose 5.4% to 5,532.59.

Hong Kong’s Hang Seng added 2.2% to 25,959.90, while the Shanghai Composite Index rose 0.7% to 4,123.14.

Stock prices have largely been swinging in tandem with oil prices, which have gyrated as the war has deepened.

In energy trading Tuesday, benchmark U.S. crude oil fell $7.56 to $87.21 a barrel. Brent crude, the international standard, fell $7.54 to $91.42 a barrel.

There is great uncertainty about how high oil prices will rise and how long they will stay there due to disruptions to Middle East energy facilities.

If oil prices remain too high for too long, household budgets, already strained by high inflation, could collapse under the pressure. Companies would see their own bills rise for fuel and for storing items on their store shelves or in their data warehouses.

Concerns have focused on the Strait of Hormuz, a narrow waterway off the coast of Iran through which a fifth of the world’s oil passes on a normal day. Iran has threatened to set fire to ships sailing through the strait.

In currency trading, the US dollar rose to 157.53 Japanese yen from 157.67 yen. The euro rose to $1.1657 from $1.1636.

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AP cameraman Ayaka McGill in Tokyo contributed.