European shares rise slightly as geopolitical tension ease in holiday thinned trading

European shares rose modestly on Tuesday, recovering further ground as geopolitical tensions eased in holiday-thinned trading, though falls among commodity related stocks capped gains.

Traditional haven assets including gold and the yen slumped and core bonds across Europe declined with Treasuries as the prospect of war between the U.S. and North Korea receded.

The greenback climbed a second day after comments from Federal Reserve Bank of New York chief William Dudley signaled another interest-rate increase this year is in the cards. The Stoxx Europe 600 Index edged higher after the German economy extended its growth spurt in the second quarter though at a slower pace than expected. The British pound tumbled to a five-week low after U.K. inflation unexpectedly held steady in July, clouding the outlook for rate increases, while oil halted a slide below $48 a barrel.

Japan’s currency, a haven in times of global tension, slumped after the Wall Street Journal characterized a North Korean media report as indicating that dictator Kim Jong Un had decided not to launch a threatened missile attack on Guam.

Meanwhile, data showed Germany’s economy expanded 0.6 percent in the second quarter, driven by domestic demand. That missed estimates slightly, but was accompanied by a revision in the first-quarter number. The euro retreated.

The Stoxx Europe 600 Index added 0.1 percent as of 10:38 a.m. in London. The MSCI All-Country World Index declined less than 0.05 percent. Germany’s DAX Index jumped 0.3 percent, as did the U.K.’s FTSE 100 Index. Futures on the S&P 500 Index increased 0.2 percent.

Japan’s Topix index finished the day 1.1 percent higher and Australia’s S&P/ASX 200 Index gained 0.5 percent at the close. Hong Kong’s Hang Seng index dropped 0.3 percent as the Shanghai Composite Index rose 0.4 percent.

Gold fell 0.6 percent to $1,274.97 an ounce. West Texas Intermediate crude gained 0.2 percent to $47.70 a barrel. This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.