(Bloomberg) — A relief rally is spreading around the globe, with Chinese shares snapping a five-day losing streak. The dollar strengthened and stocks extended gains after the U.S. economy grew more than forecast in the second quarter.
Shares rose in Europe and Asia while U.S. futures gained after the biggest advance in the Standard & Poor’s 500 Index in four years on Wednesday helped restore some appetite for riskier assets. Chinese stocks posted their steepest gains in seven weeks after a surge in the last hour of trading in Shanghai. People familiar with the matter said the government stepped in to shore up prices.
The rally in U.S. stocks halted the selloff that’s engulfed global markets since China devalued its currency on Aug. 11, stoking concern the slowdown in the world’s second-largest economy threatened global growth. Data today showing a pickup in the U.S. economy bolstered confidence in the outlook, following the rout that erased $8 trillion from the value of global equities in two weeks.
“We got our pullback, and now we’re going to focus on U.S. things like GDP and the Fed,” said John Canally, chief economic strategist at LPL Financial Corp. in Boston. “When you’re in a correction, it’s not fun, but when you’re out, you can refocus on what matters.”
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Raw-material producers led gains in Europe, with the Stoxx Europe 600 Index climbing 3.2 percent at 9:10 a.m. in New York. S&P 500 futures advanced 1.3 percent after the gauge jumped 3.9 percent on Wednesday. A gauge of commodities rebounded from a 16-year low. The dollar climbed 0.7 percent to $1.1232 per euro.
Russia’s ruble led a rebound in emerging-market currencies and industrial metals climbed with oil. Ukraine bonds jumped the most on record after the country reached a deal with creditors.
Volatility eased after gauges reached their highest levels since 2011 this week. Europe’s VStoxx Index fell 14 percent on Thursday, while the U.S. VIX dropped 26 percent in two days, the most in more than a month.
“There is a bounce from the oversold level,” said Veronika Pechlaner, an investment manager at Ashburton Ltd. in Jersey, the Channel Islands. “We believe the structural growth potential for China will gradually decline, but it doesn’t have to be a shock.”
Futures extended gains after a Commerce Department report showed U.S. gross domestic product rose at a 3.7 percent annualized rate, exceeding all estimates of economists surveyed by Bloomberg and up from the 2.3 percent. Labor Department data showed jobless claims fell to a three-week low last week.
The Bloomberg Dollar Spot Index rose 0.2 percent and the yield on 10-Year Treasuries increased one basis point to 2.19 percent.
The MSCI Emerging Markets Index advanced 2.7 percent, the most in two years, as valuations near the lowest level since March 2014 spurred appetite for riskier assets. The ruble jumped 2.8 percent and Taiwan’s dollar rose 1.4 percent, leading gains as a gauge of 20 currencies rebounded from a record low.