US and European shares pared earlier gains yesterday when depressed oil prices failed to sustain a rally.

Major US stock indexes initially rose in morning trading, building off of Monday’s late-session rallies after historically poor starts to 2016, but a Wall Street rally faltered by midday as crude prices approached the $30 per barrel mark.

The pan-European FTSEurofirst 300 index climbed 1.1 per cent after four sessions of declines.

Volatile Chinese markets and the deepening slide of oil have shaken sentiment in equities to start 2016. China stocks closed higher on yesterday as the central bank tried to stabilise the yuan.

Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, said stocks were “ripe for a bounce” but it was “too soon to tell whether this is something indicative of a more sustainable rally”.

The Dow Jones industrial average fell 9.76 points, or 0.06 per cent, at 16,388.81, the S&P 500 gained 1.2 points, or 0.06 per cent, at 1,924.87 and the Nasdaq Composite added 20.87 points, or 0.45 per cent, at 4,658.86.

Shares of Apple, which rose one per cent after a broker upgrade, helped prop up the indexes.

In Europe, shares of retailers were higher after trading up after solid corporate updates. MSCI’s broadest gauge of stocks globally rose 0.1 per cent after eight straight down sessions.

Oil has been dragged lower by a glut, China’s weakening economy and stock market turmoil, as well as the strong dollar, which makes it more expensive for those using other currencies to buy oil.

US crude prices fell 3.5 per cent to $30.29 a barrel, while benchmark Brent dropped 2.7 per cent to $30.67 a barrel.

“Oil prices have bounced just over $30 per barrel, in a weak fashion that brings dead cats to mind,” Seth Kleinman, head of energy research at Citigroup said.

The US dollar rose for a third straight session as gains on Wall Street and calmer financial markets enhanced appetite for currencies that offer higher yield.

The dollar rose 0.4 per cent against a basket of currencies, while the euro slipped 0.2 per cent against the dollar.

“We’re seeing a reversal of what we saw in that first week and the dollar has been benefiting as a result,” said Sireen Haraji, currency strategist at Mizuho Securities in New York.

US Treasury prices rose yesterday in choppy trading as oil prices resumed their decline and ahead of a Treasury sale of $24 billion of three-year notes, increasing appetite for safe-haven US government debt.

Benchmark 10-year US Treasury notes rose 3/32 in price to yield 2.1472 per cent, from 2.158 per cent late on Monday. Falling oil prices and concerns over global growth have raised demand for safe-haven debt.

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