GLOBAL MARKETS-Economy hopes support shares, oil edges up on Mideast tensions

* Share prices near this year's peak in many markets
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Sterling rises after Juncker's comments on Brexit
* China cuts new 1-year lending benchmark rate by 5 bps

By Hideyuki Sano
TOKYO, Sept 20 (Reuters) - Asian share prices inched higher
on Friday as economic stimulus around the world eased fears over
slowing growth, while crude oil prices climbed on concerns that
last weekend's attacks on Saudi Arabia's oil facilities still
pose supply risks.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.15% though it is on course to post its
first weekly decline in five, hit by sizable losses in Hong Kong
and India.
Japan's Nikkei .N225 rose 0.46% to come within striking
distance of its year-to-date peak and U.S. and European shares
also stood near their best levels this year.
The S&P 500 .SPX ended flat on Thursday, staying than less
than 1% below its closing record high hit in July, while the
pan-European FTSEurofirst 300 .FTEU3 index also came within
sight of this year's peak.
Monetary easing by the U.S. Federal Reserve this week and by
the European Central Bank last week underpinned investor
sentiment.
China also cut its new one-year benchmark lending rate for
the second month in a row on Friday, by 5 basis points as
Beijing seeks to guide borrowing costs lower for an economy hit
by the Sino-U.S. trade war. "The direct and immediate impact on the economy will be
limited given the small size of the cut, but the cut has made it
clear the Chinese authorities are taking an accommodative stance
and should give reassurance to Chinese stock markets," said Wang
Shenshen, economist at Tokai Tokyo Research Center.
The latest U.S. economic data also eased worries about
slowdown in the world's largest economy.
The number of Americans filing applications for unemployment
benefits increased less than expected last week while home
resales rose to a 17-month high in August.
"Investors are starting to price in the possibility of
re-acceleration in the global economy next year. So far this
month China has taken steps to support the economy, and U.S. and
European central banks eased policy," said Nobuhiko Kuramochi,
chief strategist at Mizuho Securities.
"There are hopes of an interim or partial trade deal between
China as U.S. President Trump will need to shore up the economy
next year before the election," he added.
U.S. and Chinese deputy trade negotiators resumed
face-to-face talks for the first time in nearly two months on
Thursday, trying to lay the groundwork for high-level talks in
early October. Hopes for a deal were so strong that the markets shrugged
off a media report that a trade adviser to Trump has said the
U.S. president is ready to raise tariffs to 50 or 100 percent.
The New York Fed continued to inject a large amount of cash
in money markets to deal with funding squeeze since the start of
week, helping to bring down interest rates in the U.S. repo
market, a key funding market USONRP= . In currency markets, the British pound kept its uptrend
after European Commission President Jean-Claude Juncker said a
Brexit deal is possible and that if the Irish border backstop
which the British government wants removed could be replaced
with alternatives, it would not be needed. Sterling traded at $1.2533 GBP=D4 , up 0.09% on the day,
having hit a two-month high of $1.2560 on Thursday. The British
unit stood near its highest levels in almost four months versus
the euro at 88.19 pence per euro EURGBP= .
The euro was at $1.105 EUR= , staying in a holding pattern
this week.
The yen edged up to at 107.91 yen to the dollar JPY= , off
its 1-1/2 month low of 108.48 yen hit on Wednesday.
The Brazilian real fell 1.4% on Thursday to 4.167 to the
dollar after the central bank slashed borrowing costs to an
all-time low and signalled it was prepared to do so again in the
coming months. Oil prices bounced back on continued worries about the
stability of oil supply as tensions between Saudi Arabia and
Iran showed little sign of abating after a weekend attack on
Saudi oil installations. Saudi-led forces on Friday launched a military operation on
northern Yemen against what it described as "legitimate military
targets", an incident that could aggravate regional tensions.
Washington said on Thursday it was building a coalition to
deter Iranian threats while Tehran has warned Trump against
being dragged into a war in the Middle East and said it would
meet any offensive action with a crushing response. Brent crude LCOc1 futures rose 0.78% to $64.90 a barrel
while U.S. West Texas Intermediate (WTI) crude CLc1 gained
1.14% to $58.79 per barrel.

(Editing by Lincoln Feast)