Stock markets rose yesterday as traders welcomed signs of a pause in US interest rate hikes, with sentiment also helped by growing optimism over Washington's trade talks with China.
European equities closed solidly firmer, but off earlier highs, while Wall Street posted modest gains in the late New York morning, having also come off the day's best levels seen shortly after the opening.
This followed two days of gains as investors seemed determined to claw back massive losses made in December.
Chinese monetary easing at the weekend added to the positive tone.
The dollar rebounded against the euro and sterling, but gave up earlier gains against the yen.
"After a terrible end to 2018 which saw global equities plummet, markets are finally seeing the colour green returning to their screens," said Hussein Sayed, chief market strategist at FXTM.
Federal Reserve chief Jerome Powell last week said that the US central bank had no "pre-set" plan for raising interest costs and was keeping a close watch on financial developments, fuelling hopes it will slow its pace of rate hikes.
"Mounting expectation that the Federal Reserve may not be in a position to hike interest rates at all during 2019 owing to the deteriorating global economic outlook has lent fresh support to US index futures," said James Hughes, chief market analyst at Axitrader.
"There's also optimism over progress being seen in the US-China trade talks which are ongoing in Beijing right now, with the involvement of President Xi's most senior aide helping lend a degree of support."
There was little expectation this week for a full agreement on the issue, which has seen the two sides impose tariffs on goods worth hundreds of billions of dollars, there hopes persisted they can make some headway.
"While we don't expect a full resolution in trade tension between China and the US in the foreseeable future, small steps in progress are likely to be taken favourably by investors," said Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management.
"The latest positive signals from the Trump administration of prospects of reaching some form of agreement and (top Xi aide) Vice Premier Liu He attending the negotiations should continue to cheer the market in the near term."
On the corporate front, Samsung yesterday forecast a near-30 per cent drop in operating profit for the December quarter – causing its shares to close down 1.7 per cent.
The South Korean behemoth cited "lacklustre demand in the memory business and intensifying competition in the smartphone business", fanning worries about the wider technology sector.