Oil prices skidded and Asian stocks jumped today after US President George W. Bush's ultimatum to Iraq cleared uncertainty that had hung over global markets for months.
Britain's top shares are expected to rise following a Wall Street rally overnight, but the mood is expected to remain nervous as investors gear up for an imminent war.
The US dollar kept its overnight gains and key Asian markets rose 2 to 4 per cent after a Wall Street rally on expectations for a swift and decisive US-led military strike on Iraq.
Crude oil prices that had risen 20 per cent this year on fears a war would disrupt supplies in the Middle East - which pumps 40 per cent of the world's oil - fell nearly a dollar a barrel in after-hours electronic trade.
The dollar, which had slumped 10 per cent against the euro in the past six months and 10 per cent against the yen from a year ago, was firmer against both currencies in volatile trade after Mr Bush's speech.
All major Asian stock markets were higher following massive gains in New York overnight. Tokyo's Nikkei average jumped 2.12 per cent to 8,038.87 at the midday break; the broader TOPIX index had risen 2.04 per cent to 793.07.
Seoul had climbed 2.56 per cent, Taiwan was 4.26 per cent higher; Singapore and Hong Kong were both up more than 2 per cent.