NEW YORK: Global stock markets rallied and China’s yuan posted its biggest gain since December on Monday as investors bet the Chinese economy would boost global growth even as surging coronavirus cases delayed business re-openings across the United States.

Data showing unexpected growth in the US services sector last month, almost returning to its pre-Covid-19 pandemic levels, helped drive Wall Street higher and lift Brent crude futures, the global benchmark for oil.

The yuan led commodity currencies higher against the dollar as investors lapped up risky assets on growing expectations of a strong economic rebound in China, where an index of blue-chip Chinese shares soared to its highest in five years.

A Chinese economic revival bodes well for Australia and Europe, which count Beijing as their biggest trading partner. The euro was up 0.64 per cent at $1.1320 and European shares jumped. The broad FTSEurofirst 300 index added 1.39pc as stocks exposed to China — carmakers, industrials, energy firms and luxury goods makers — rose strongly. Banks also rallied.

China’s offshore yuan was on track for its best day against the dollar since December 12, up 0.76 at 7.0148.

Chinese blue chips jumped 5.7pc on top of a 7pc gain last week to their highest in five years. Even Japan’s Nikkei , which has lagged due to a soft domestic economy, rose 1.8pc.

MSCI’s All-Country World Index, a gauge of equity performance in 49 countries, rose 1.78pc. Emerging markets rose 2.71pc, their biggest single-day gain in three months.

On Wall Street, the Dow Jones Industrial Average rose 371.38 points, or 1.44pc, to 26,198.74. The S&P 500 gained 46.84 points, or 1.50pc, to 3,176.85 and the Nasdaq Composite added 218.20 points, or 2.14pc, to 10,425.83.

Oil prices were mixed. Brent crude was up 42 cents, or up 0.98pc, at $43.22 a barrel. US crude was up 15 cents, or up 0.37pc, at $40.80 per barrel.

Spot gold traded at $1,776.21 per ounce, just off last week’s peak of $1,788.96.

Published in Dawn, July 7th, 2020