Global equity markets hit their highest in a month yesterday as stellar results from Google parent Alphabet underpinned tech stocks and China promised fiscal action to support the world’s second-largest economy.

MSCI’s index of stock markets around the world gained 0.86 per cent after Wall Street opened higher. Alphabet Inc, part of the so-called FAANG group of popular tech stocks that have led the US market’s near-decade bull run, jumped 4.8 per cent to a record high after a better-than-expected quarterly revenue jump.

Metals prices surged thanks to stimulus signals in Beijing, while global bonds were still volatile following speculation that the Bank of Japan (BoJ) may soon trim its massive stimulus. Clawing its way back from prices near one-year lows, copper rose 2.7 per cent.

China’s offshore yuan, meanwhile, hit a one-year low and Beijing’s government bond yields jumped after the Cabinet said it would pursue a more vigorous fiscal policy and as traders bet on further easing in monetary conditions. Shanghai blue chips closed up 1.5 per cent at a one-month high.

The offshore yuan fell nearly 0.6 per cent to a low of 6.8448 per dollar before rebounding. The People’s Bank of China (PBOC) had set conversion rates at their weakest in a year.

The moves suggested the possibility that currencies may be weaponised in a flaring US-China trade conflict.

“The big story is that the Chinese currency continues to slide,” said Societe Generale FX strategist Alvin Tan.

“It is clear that the government is moving towards policies that are supporting growth,” Mr Tan added, saying that the trend was likely to bring a reaction from the US in time.

The focus in the US remained the banner corporate earnings season, which is in its busiest week, with 39 per cent of benchmark S&P 500 index companies reporting, according to Bank of America Corp.

To date, 83 per cent of the 110 S&P 500 companies that have posted results have beaten profit estimates, according to Thomson Reuters I/B/E/S.

The Dow Jones rose 207.89 points to 25,252.18, the S&P 500 gained 22.74 points to 2,829.72, and the Nasdaq Composite added 76.93 points to 7,918.80.

Bonds remained also in the spotlight after ten-year US Treasury yields charged to a one-month high above 2.97 per cent.

Markets were worried Japanese investors would have less incentive to hunt offshore for yield, said ANZ economist Felicity Emmett.

“The 10-basis-point steepening in the Japanese yield curve is massive in the context of a market that rarely moves more than one basis point,” she said.

Part of the shift in yields was caused by talk that data on second-quarter US economic growth would top the current forecasts of 4.1 per cent.

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