China Bounce Ends Stocks' Five-day Losing Streak, Commodities Surge

World stocks snapped a five-day losing streak on Thursday, as Beijing halted a rout in Chinese stocks and Europe revived hopes.

Published: 10th July 2015 01:21 AM  |   Last Updated: 10th July 2015 01:22 AM   |  A+A-

trader-NYSE-reuters

A trader works shortly after the opening bell on the floor of the New York Stock Exchange, July 9, 2015. | Reuters

LONDON: World stocks snapped a five-day losing streak on Thursday, as Beijing halted a rout in Chinese stocks and Europe revived hopes that Greece could be kept in the euro currency union.

Wall Street started more than 1.2 percent higher <ESc1> having been dragged into the red for the year on Wednesday by China's market crash, cliff-hanger talks on Greece and a glitch on the New York Stock Exchange.

European shares had raced up over 2 percent as Prime Minister Alexis Tsipras rushed to finalise a package of Greek tax hikes and pension reforms needed to win a new aid lifeline.

Without the money it will have to print another currency, probably leading to its exit from the euro.

Irish Finance Minister Michael Noonan said he saw a better than 50 percent chance of a deal being reached by Sunday's deadline following a "distinct change of mood" in recent days.

"The realistic proposal from Greece will have to be matched by an equally realistic proposal on debt sustainability from the creditors. Only then will we have a win-win situation," added European Council President Donald Tusk in Luxembourg.

Hopes of an agreement, which had looked all but doomed a few days ago, as well as more traditional market support from German export data, helped the DAX <.GDAXI>, France's CAC 40 <.GDAXI> and bourses in Italy <.FCHI>, Spain <.IBEX> and Portugal <.PSI20> jump between 2.1-3.4 percent.

Southern euro zone government bonds also rallied in debt markets although investors were reluctant to make too big a move given recent failures to reach a Greek deal.

"The midnight deadline for Europe seems a long way away," said Nick Parsons, global head of forex at National Australia Bank in London.

"We have a traditional risk-on mood, but there is a general wariness that is crimping investor participation in the market. The order flow really is very thin," he added.

Chinese markets boosted the global mood, pulling out of their recent dive. The main stock index <.CSI300> rose 6.4 percent, almost as much as it had fallen the previous day, after the securities regulator ordered shareholders with stakes of more than 5 percent not to sell for the next six months.

In relief throughout Asia, MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose 1.8 percent and the main emerging markets index <.MIAPJ0000PUS> scored its best gain since January.

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