(MENAFN- AFP) Global stock markets rose Thursday on renewed confidence in the US recovery after days of wild swings, but dealers warned that the spectre of the slowing Chinese economy threatens more turbulence ahead.
Equities in Europe and on Wall Street climbed on revised US data showing stronger US growth in the second quarter of 3.7 percent, compared with the previous estimate of 2.3 percent.
"The US economy continues to perform on a consistent basis .... (showing) that its economic recovery is sustainable... The United States is leading the global economy as it has been since late last year," said FXTM chief market analyst Jameel Ahmad.
The news gave comfort to investors rattled by slagging Chinese growth, and sent US indices at or near 1.7 percent higher in mid-day trade in New York, after snapping a six-day losing streak on Wednesday by closing about 4.0 percent ahead.
Europe's main markets rebounded Thursday, erasing losses earlier in the week, with Frankfurt's DAX 30 index finishing up 3.18 percent and the CAC 40 in Paris gaining 3.49 percent. London's benchmark FTSE 100 index soared 3.56 percent at the close.
- 'Bit of relief' -
Asian equities also rallied Thursday after several tumultuous days, but dealers cautioned that enduring concerns about China would spell more uncertainty.
Shanghai soared 5.34 percent to end the worst five-day rout for almost two decades, cheered partly by this week's interest rate cut from the People's Bank of China (PBoC) aimed at boosting the world's second-largest economy, which represents some 13 percent of global GDP.
In addition, after a strong rise in the last hour of Shanghai trade, brokers said there was speculation over state buying or a possible top-level meeting of the State Council, or cabinet, which could detail more measures to support the market.
"There were external funds flowing in, but it's uncertain if it was the national team," Shenwan Hongyuan analyst Gui Haoming said, referring to entities which trade on behalf of the government.
Qian Qimin, also of Shenwan Hongyuan, added that investors expect that "pension funds will enter the market."
China said Sunday that its huge state pension fund will be allowed to invest up to 30 percent of assets -- which totalled 3.5 trillion yuan at the end of 2014 -- in stocks.
Elsewhere in Asia, Hong Kong shares hurtled 3.60 percent higher, Tokyo gained 1.08 percent and Sydney added 1.17 percent.
"For now there is quite a bit of relief that stocks in China are finally staging a moderate and long-awaited bounce back," said analyst Markus Huber at brokerage Peregrine & Black.
World markets had suffered a torrid start to the week on "Black Monday", when Shanghai collapsed by almost 8.50 percent, sparking fears that China's slowdown could herald a global recession.
- 'Outlook murky' -
Analysts have cautioned that the stocks rout, which wiped $8 trillion off world shares in just over two weeks and battered commodities and emerging market currencies, is far from over.
While not predicting a 'hard landing' for China, "risks abound and the outlook is murky because China has been the world's strongest engine of growth and Asia's manufacturing hub for the past 15 years and its slowdown is associated with sharp declines in commodity prices," said Mickey D. Levy, Berenberg's chief economist for US, Americas and Asia.
"These price declines will benefit the US and European economies over time, but will hurt select commodity-exporting nations, particularly emerging nations, depressing their currencies, forcing changes in monetary policy and affecting international trade," he added.
Concerns that the US Federal Reserve could raise interest rates as early as next month have also been heaping pressure on world markets. But on Wednesday, the head of the New York branch of the Fed, William Dudley, said the China turmoil had weakened the argument for a rate hike in September.
In London currency trading Thursday, the dollar bought 120.95 yen up from 119.98 yen late in New York on Wednesday.
The euro rose slightly to 135.90 from 135.72 yen, but fell against the dollar to $1.1236 from $1.1312.
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