A global gauge of equities rose for a second day yesterday, posting its largest daily advance in four months as investors bet on a reduced risk of direct conflict between Russia and Ukraine while tensions in Gaza eased as a new 72-hour truce appeared to be holding.

In a continued exodus from safety assets, the yields of US debt rose slightly as investors sold bonds, nudging prices down. Spot gold prices also fell.

An index of Russian stocks jumped 2.8 per cent after sliding over the past four weeks.

Yesterday, the Kremlin ruled out a unilateral humanitarian operation in eastern Ukraine, which Nato had feared would serve as a cover for Moscow to invade its neighbor. Still, Russia said it was sending an aid convoy to Ukraine in collaboration with representatives of the International Committee of the Red Cross.

Nato, however, still sees a “high probability” of a Russian invasion after it said some 20,000 Russian troops massed on the nearby border. Kiev had the number at 45,000 Russian troops.

Investors also monitored Iraq, where the United States recently launched air strikes targeting Islamic State fighters marching on the country’s Kurdish capital.

US stocks also got a lift from comments by Federal Reserve Vice Chairman Stanley Fischer, who said long-run annual growth in the United States may now be perhaps as low as two per cent, a full percentage point below the estimate of Fed policymakers as recently as 2009. His remarks may cool more hawkish expectations that the Fed is ready to start a tightening cycle in monetary policy sooner than many in markets expect.

The Dow Jones industrial average rose 52.04 points or 0.31 per cent, to 16,605.97. The S&P 500 gained 10.18 points or 0.53 per cent, to 1,941.77. The Nasdaq Composite added 37.52 points or 0.86 per cent, to 4,408.42.

An MSCI index of stocks traded in major markets around the world shot up 0.9 per cent, though it was still down three per cent from a record closing high set early in July.

The pan-European FTSEurofirst 300 index jumped 1.3 per cent after losing two per cent last week.

Yields on 10-year US debt retraced from last week’s 14-month lows following a 72-hour truce between Israelis and Palestinians as both sides sought to end their month-old war in Gaza.

On below-average volume, the yield on the 10-year US Treasury note was last at 2.4203 per cent, up five basis points for the day. On Friday, it briefly fell to 2.349 per cent, a level not seen since June 2013.

The euro remained under pressure against the US dollar on expectations of monetary policy easing from the European Central Bank and the effect of sanctions on Russia. The euro was down 0.2 per cent on the day against the dollar at $1.3386.

US crude oil and Brent crude futures were mixed, with US crude ticking up 21 cents to $97.86 per barrel and Brent crude edging down 17 cents to $104.85.

Spot gold slipped 0.2 per cent to $1,306 an ounce.

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