US and European stocks strode ahead, oil prices weakened and US Treasury prices eased today after UN weapons inspector Mr Hans Blix's report to the Security Council signaled a slowdown on the road to war with Iraq.
"The market seems to be interpreting (Blix's) comments as suggesting any war will be delayed," said Mr Lex Werkheim, a fund manager at Eureffect in Amsterdam.
"The market thinks the weapons inspector will be given more time to work." US light crude prices were down 28 cents to $36.08 a barrel as Blix made his remarks.
Oil prices are at more than a 2-year high, and within $5 of highs of more than $41 a barrel hit in the build-up to the Gulf War a decade ago.
European shares bounced off six-year lows, helped by a late rebound on Wall Street.
French stocks ended sharply higher as investors read comments by UN weapons inspectors as a sign war against Iraq may be delayed.
The benchmark CAC-40 index ended 2.5 per cent higher at 2,827.75 points, outperforming London but underperforming Frankfurt.
The London market closed a fraction above its opening level today as gains from oil and insurance shares were offset by slides from Lloyds TSB and Invensys.
By the close of trading, the FTSE 100 Index was up 1.1 points at 3611.9, after losing nearly all its earlier gains - at one point the market was 72.8 points ahead.
Stocks in the US climbed in late morning trading, as the market gave a positive early reaction to a crucial speech by Dr Blix and upbeat results from Dell Computer bolstered tech shares.
The Dow Jones industrial average gained 85.91 points, or 1.11 per cent, to 7,835.78, while the broader Standard & Poor's 500 Index climbed 8.74 points, or 1.07 per cent, to 826.11. The technology-laced Nasdaq Composite Index rose 17.38 points, or 1.36 per cent, to 1,294.82.
Earlier in Tokyo, the Nikkei 225 average closed at a three-week high after stronger-than-expected growth data encouraged investors to buy index heavyweights, such as Tokyo Electron Ltd.
The Nikkei average ended up 1.19 percent at 8,701.92, its highest close since Jan. 24, bringing gains for the week to 3 percent. The broader TOPIX index rose 0.59 percent to 858.05.