Stock markets worldwide bounced back yesterday after a multi-day selloff that left the equity markets on track for their biggest weekly losses in months, while US Treasury yields moved higher and the dollar held its gains.

Wall Street surged after the US stock market’s worst two days of losses since February, with the technology sector moving towards its best day in seven months after being hammered earlier in the week.

The Dow Jones Industrial Average climbed 294.13 points, or 1.17 per cent, to 25,346.96, the S&P 500 gained 41.12 points, or 1.51 per cent, to 2,769.49 and the Nasdaq Composite added 161.90 points, or 2.21 per cent, to 7,490.96.

The MSCI All-Country World index, which tracks shares in 47 countries, was up 1.4 per cent on the day.

European stocks also opened higher following a rise in Asian shares overnight, but began to edge lower by mid-morning. The pan-European FTSEurofirst 300 index lost 0.06 per cent.

Results for the United States’ largest banks, which began to roll in yesterday, were expected to set the tone for earnings season and help gauge the impact on US company profits from President Donald Trump’s trade war with China.

The biggest market shakeout since February has been blamed on factors including fears about the impact of the US-China tariff fight, a spike in US bond yields this week and caution ahead of earnings season.

Trade figures from China on Friday showed China’s trade surplus with the United States hit a record high in September, providing a likely source of contention with Mr Trump over trade policies and the currency.

The data showed solid expansion in China’s overall imports and exports, suggesting little damage to the country from the tit-for-tat tariffs with the US.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 2.31 per cent, the biggest one-day gain for more than two years. The bounce came after the index fell 3.6 per cent on Thursday to hit a 1-1/2-year low.

Japan’s Nikkei average rose half a percent. The dollar index rose 0.25 per cent, with the euro  down 0.29 per cent to $1.1559.

US Treasury yields rose yesterday, recovering from falls in the previous session, after data showed US import prices grew at a faster pace than expected last month, adding to the narrative that inflation is accelerating.

Gold, which had risen to a 10-week high on the back of the stock market selloff, fell 0.4 percent to $1.219.38 an ounce.

Oil rebounded towards $81 a barrel as the equities rally lent support, though prices pared gains after a closely watched forecaster deemed supply adequate and the outlook for demand weakening.

US crude rose 0.55 per cent to $71.36 per barrel and Brent was last at $80.36, up 0.12 per cent on the day.

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