Volkswacht Bodensee - Stocks rise as optimism over Mideast war takes hold

Signs of fresh talks aimed at ending the war launched by the US and Israel against Iran have pushed stock indexes to all-time highs, suggesting investors expect a quick economic rebound from the conflict.

The Tokyo stock market reached a record high Thursday, following all-time peaks for key US indexes on Wednesday as investors cheered healthy earnings for US blue chips despite surging oil prices and rising inflation overall.

Global stock markets "have staged one of the fastest recoveries in recent memory", said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

At the same time, "oil prices remain elevated... as investors look towards a possible extension of the ceasefire between the US and Iran while weighing the chances of a broader agreement that could ultimately reopen the Strait of Hormuz", he said.

The waterway, through which one-fifth of oil and gas usually passes, has been choked by Iranian forces since the US-Israeli offensive began.

In the eurozone, inflation leapt to 2.6 percent in March on surging energy prices, official data showed Thursday.

Yet even as the global economy reels from the fallout of war in the Middle East, China's economic growth topped expectations in the first quarter of the year, official figures showed.

Gross domestic product in the world's second-largest economy expanded 5.0 percent in the quarter from a year earlier.

"Hope has given way to a bright, beaming light at the end of the peace tunnel," said Stephen Innes at SPI Asset Management.

"The market is no longer asking whether there will be a deal. It is trading as if the deal is already signed, sealed, and quietly filed away."

The Tokyo and Seoul stock markets led a rally in Asia, as traders poured back into the AI-based tech investments that helped send global stock markets surging before the Middle East war started on February 28.

In a sign of the still-strong demand for artificial intelligence, Taiwanese chip manufacturer TSMC reported a record first-quarter profit of $18 billion, far outpacing estimates.

- Key figures at 1345 GMT -

New York - Dow Jones: UP 0.3 percent at 48,585.58 points

New York - S&P 500: UP 0.1 percent at 7,028.05

New York - Nasdaq: DOWN 0.1 percent at 29,993.12

London - FTSE 100: UP 0.6 percent at 10,623.47

Paris - CAC 40: UP 0.5 percent at 8,319.12

Frankfurt - DAX: UP 0.5 percent at 24,184.47

Tokyo - Nikkei 225: UP 2.4 percent at 59,518.34 (close)

Hong Kong - Hang Seng Index: UP 1.7 percent at 26,394.26 (close)

Shanghai - Composite: UP 0.7 percent at 4,055.55 (close)

Brent North Sea Crude: UP 1.8 percent at $96.60 a barrel

West Texas Intermediate: UP 1.1 percent at $89.12 a barrel

Euro/dollar: DOWN at $1.1778 from $1.1801 on Wednesday

Pound/dollar: DOWN at $1.3547 from $1.3570

Dollar/yen: UP at 159.06 yen from 158.97 yen

Euro/pound: DOWN at 86.92 pence from 86.95 pence

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F.Wagner--VB