Japan’s inflation cools, complicating central bank’s policy decisions
Sterling rises after Labour’s election defeat in Greater Manchester
Pakistan escalates conflict with Afghanistan
(Updates prices throughout)
By Rocky Swift and Lucy Raitano
TOKYO/LONDON, Feb 27 (Reuters) -
Global shares edged up on Friday to within a fraction of a fresh record high, and were set for a monthly gain, even as geopolitical tensions and persistent concerns about AI caused wild swings under the surface.
Manish Kabra, head of U.S. equity strategy at SocGen, said in the absence of any major news, the market is refocusing on fundamentals which he described as “rock solid.”
“This is on a global basis. When I say fundamental, this is the profit cycle, the growth cycle, the broadening of the growth,” said Kabra.
Global shares (.MIWO00000PUS) rose 0.2%, while Europe’s STOXX 600 (.STOXX) was up 0.4%, buoyed by positive earnings.
Nevertheless, jitters around AI spending and fears about the technology’s broader business disruptions, as well as U.S.-Iran tensions, have weighed on sentiment this week.
U.S. stock market futures were flashing red during early European trading, with S&amp;P futures (EScv1) off 0.2% while the tech-heavy Nasdaq futures (NQcv1) were flat.
Tech shares fell on Thursday even as Nvidia posted better-than-expected results for the January quarter and forecast current-quarter revenue above market estimates.
“It seems ‘the Street’ simply wanted more, or perhaps just isn’t prepared to chase the stock at its current lofty valuation,” IG market analyst Tony Sycamore said about Nvidia’s results in a note.
Shares in Nvidia down over 5% ended Thursday.
<h3>IRAN TENSIONS SIMMER</h3>
Markets were also closely watching the latest developments in U.S. and Iran nuclear talks, as Washington amassed more military resources in the Middle East.
An Omani mediator of U.S. and Iran nuclear talks gave an optimistic summary of the latest round of negotiations, but signs of a breakthrough that would avert potential U.S. strikes remained elusive.
“With no major breakthroughs announced in the U.S.–Iran talks, crude markets remained in wait-and-see mode, continuing to price in a significant risk of military escalation between the two countries,” said Mantas Vanagas, senior economist at Westpac Group.
U.S. crude (CLc1) rose 1.4% to $66.16 a barrel, and Brent (LCOc1) rose to $71.65, up 1.3%. Spot gold (XAU=) shed 0.15% to $5,178.29 an ounce.
The U.S. and Iran plan to resume negotiations over Tehran’s nuclear programme after consultations in their countries’ capitals, Omani Foreign Minister Sayyid Badr Albusaidi said in a post on X after the day’s meetings in Switzerland.
Any substantial move forward could curb chances for U.S. President Donald Trump to carry out a threatened attack on Iran that many fear could escalate into a wider war.
<h3>POLITICS ALSO IN FOCUS FOR CURRENCIES</h3>
The dollar index (=USD) , which measures the greenback against a basket of currencies, was flat at 97.73, with the euro (EUR=) up 0.07% at $1.1805. The yen (JPY=) was flat 156.16 per dollar.
Sterling (GBP=) rose 0.1% to $1.349 after British Prime Minister Keir Starmer’s Labour Party suffered an election defeat in an area of Greater Manchester that it had dominated for almost a century.
The yield on benchmark U.S. 10-year notes (US10YT=RR) fell 2.6 basis points to 3.99%.
Data in Japan showed cooling inflation in Tokyo and weaker-than-expected factory output, complicating the case for policy rate increases by the central bank. The data came on the heels of Prime Minister Sanae Takaichi putting forward two Bank of Japan board nominees who share her dovish mindset.
Japanese Finance Minister Satsuki Katayama signalled heightened vigilance over currency moves, telling parliament the government is monitoring the yen’s recent drop with a strong sense of urgency.

NVDA

Global shares rose slightly, nearing record highs, with a monthly gain expected despite geopolitical tensions and AI concerns. Japan's cooling inflation complicates central bank policy, while the U.S. and Iran's nuclear talks remain tense. The dollar index was stable, and sterling rose after Labour's election defeat. U.S. crude and Brent oil prices increased, reflecting market uncertainty. Analysts noted a focus on fundamentals amidst mixed tech earnings, with Nvidia shares falling despite strong results. Overall, markets are in a wait-and-see mode regarding geopolitical developments and economic indicators.

- Global shares saw a slight increase, nearing a record high despite geopolitical tensions and AI concerns affecting market sentiment.  
- Japan reported cooling inflation and weaker factory output, impacting the Bank of Japan's policy decisions amid recent political changes and currency fluctuations.  
- In currency markets, the British pound rose following a Labour Party electoral defeat in Greater Manchester, while U.S. crude prices increased amid ongoing U.S.-Iran nuclear negotiations.

Reuters

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GLOBAL MARKETS-Global shares inch higher, on track for monthly gain despite AI, Iran jitters