World stocks advanced energetically Thursday as investors hunted for bargains following heavy losses caused by anxiety over the deepening US-China trade war.
"The trade spat is far from over, but while the rhetoric and the actions have been dialled down, traders are swooping in snapping up relatively cheap stocks," said David Madden at CMC.
Positive export data out of China calmed Asian nerves early in the day, causing equities in the region to rise.
Then equity markets in Europe, taking their cue from Asian strength, powered ahead to post solid gains by the close.
- 'Nicely higher'-
"The fightback continues in the wake of the global selloff", said Joshua Mahony, senior market analyst at IG.
American stock markets built on a rebound seen late Wednesday when they "were able to climb out of a deep hole", as Charles Schwab analysts put it.
"US stocks are nicely higher on the heels of yesterday's decisive late-day recovery, with stronger-than-expected Chinese export data helping ease elevated trade fears and some stabilization in the recent plunge in global bond yields also aiding sentiment," they said.
But analyst Michael Hewson at CMC Markets warned that there was no guarantee the recovery would last.
"For this rebound to gain further momentum we would need to see evidence of a softening of the rhetoric around trade, and a willingness on the part of both parties to dial back their current positions," he said.
There was little faith in such a scenario across trading floors, and safe haven assets such as bonds, gold and the yen remained in demand.
- Indecision -
Oil prices rebounded strongly, a day after slumping to seven-month low points on higher-than-expected US crude supplies, while bond markets gave up some of the previous day's sharp gains.
"It's safe to say investors are struggling to make up their mind at the moment," said Craig Erlam, senior market analyst at Oanda trading group.
"On the one hand, the trade war is a significant downside risk to the global outlook but on the other, central banks are cutting rates around the world in a bid to halt the slowdown before it takes hold."
Equities tumbled this week after Beijing allowed the yuan to slide sharply against the dollar following US President Donald Trump's announcement that he would impose 10 percent tariffs on another $300 billion in Chinese goods from September 1.
But Beijing's move to then stabilise the yuan helped to ease investor fears.
China's central bank on Thursday set the currency's central parity rate above 7.0 against the dollar for the first time in 11 years.
- Easy does it -
Beijing does not want "a very sharp, sudden move weaker that could result in a big jump in capital outflow", said Julian Evans-Pritchard, senior China economist at Capital Economics.
"So they are trying to effectively manage the process and engineer a gradual depreciation," he told AFP.
Multiple rounds of tit-for-tat tariffs between the United States and China have hammered trade and raised concern for the health of the global economy.
Negotiators are set to reconvene in Washington in early September for another round of talks after last week's discussions in Shanghai, but hopes for an agreement are faint.
- Key figures around 1545 GMT -
London - FTSE 100: UP 1.2 percent at 7,285.90 points (close)
Frankfurt - DAX 30: UP 1.7 percent at 11,845.41 (close)
Paris - CAC 40: UP 2.3 percent at 5,387.96 (close)
EURO STOXX 50: UP 2.0 percent at 3,375.38
New York - Dow: UP 1.0 percent at 26,261.03
Tokyo - Nikkei 225: UP 0.4 percent at 20,593.35 (close)
Hong Kong - Hang Seng: UP 0.5 percent at 26,120.77 (close)
Shanghai - Composite: UP 0.9 percent at 2,794.55 (close)
Euro/dollar: UP at $1.1217 from $1.1203
Pound/dollar: UP at $1.2146 from $1.2140 around 2100 GMT
Euro/pound: UP at 92.34 pence from 92.26 pence
Dollar/yen: DOWN at 106.13 yen from 106.23 yen
Brent North Sea crude: UP $1.35 at $57.58 per barrel
West Texas Intermediate: UP $1.68 at $52.77 per barrel