NEW YORK/LONDON June 12 (Reuters) - MSCI's global equities index rose on Friday and oil prices fell on fresh hopes for a peace deal between Iran and the U.S., while investors awaited the hotly anticipated market debut of Elon Musk's SpaceX (SPCX.O).
Stocks had rallied sharply on Thursday after U.S. President Donald Trump said the countries were close to a deal. But, on Friday, terms of a proposed memorandum to end the war in the Gulf outlined by Western, Pakistani and Iranian sources on Friday appeared to strongly favour Iran, drawing criticism from Trump, who called the reports inaccurate.
Meanwhile, Iranian Foreign Minister Abbas Araqchi said that an "Islamabad Memorandum of Understanding" for addressing the U.S.-Israeli war on Iran had "never been closer", but urged media outlets to refrain from speculating about its contents until it was finalised.
U.S. Treasury yields rose while the dollar edged up in morning trading while stocks climbed back up from morning declines. While investors were hopeful for Middle East progress, Chris Zaccarelli, chief investment officer at Northlight Asset Management, said they were anxious for details.
"You never know what the final details will be. You never know which side has the whole story. That's what markets have been really grappling with, not knowing who to believe," said the money manager who added that after the "really large pop" on Thursday, some investors were taking profits on Friday.
Trump has repeatedly said a deal with Iran to end the war was close since mid-March. This time, the indication that diplomacy was continuing productively was enough for the market to latch on to, Michael Nizard, head of multi-asset at Edmond de Rothschild Asset Management, said, "Today, I think the (potential for) peace is well under-priced."
Northlight's Zaccarelli noted that Friday's other main focus for the market is the SpaceX IPO, which raised a record $75 billion, valuing the rocket and spacecraft manufacturer at $1.77 trillion and making Musk the world's first trillionaire.
"It's a barometer for overall risk appetite and the health of the market in general. So generally speaking, a positive result on this specific IPO because it's so large and so high profile, does bode well for the broader market," he said.
On Wall Street at 10:45 a.m. ET (1445 GMT) the Dow Jones Industrial Average (.DJI) rose 225.95 points, or 0.45%, to 51,075.77, the S&P 500 (.SPX) rose 4.13 points, or 0.06%, to 7,398.43 and the Nasdaq Composite (.IXIC) fell 69.72 points, or 0.28%, to 25,736.91.
MSCI's gauge of stocks across the globe (.MIWD00000PUS) rose 8.91 points, or 0.81%, to 1,108.46.
The pan-European STOXX 600 (.STOXX) index rose 1.46%. The European Central Bank had to raise interest rates for the first time in nearly three years on Thursday to nip war-driven inflation in the bud. Final inflation data from several European countries including France and Spain showed inflation accelerated in May, while official data showed Britain's economy contracted by 0.1% in April — its first monthly drop since August.
In energy markets, oil futures were adding to Thursday's losses. U.S. crude fell 1.45% to $86.44 a barrel after touching its lowest level in almost two months. Brent fell to $89.19 per barrel, down 1.32% on the day after earlier falling to its lowest level in three months.
In fixed income markets, U.S. Treasury yields rose from one-week lows as traders also looked ahead to next week's Federal Reserve policy meeting, which will be first under the leadership of Kevin Warsh.
In currencies, the dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.05% to 99.78, with the euro down 0.05% at $1.1571.
Against the Japanese yen , the dollar strengthened 0.21% to 160.25. Traders are still on high alert for intervention from Japanese authorities as the yen stays close to the 160 level that many see as a line in the sand.
In precious metals, spot gold fell 0.71% to $4,183.92 an ounce while spot silver fell 1.3% to $66.48 an ounce.
Reporting by Sinéad Carew, Iain Withers, Stella Qiu; Editing by Shri Navaratnam, Kevin Buckland and Andrew Heavens
