'Relief rally' pushes global equity markets higher; bonds flat'Relief rally' pushes global equity markets higher; bonds flat
The German share price index DAX graph at the stock exchange in Frankfurt

By David Randall

NEW YORK (Reuters) – Global equity markets surged and the dollar fell from two-month highs Monday as investors moved into the shares of beaten-down sectors on the heels of a sharp stock market sell-off the week before.

Asian shares gained, with Chinese shares boosted by data over the weekend showing China’s industrial firms grew for the fourth consecutive month in August.

“We’re seeing a bit of a relief rally,” said Jonathan Bell, chief investment officer at Stanhope Capital. “Things got oversold perhaps a little bit in the short term.”

“We saw quite a lot of exuberance in July and August, with prices particularly of tech stocks rising and that then has come off a little bit recently,” he said.

MSCI’s gauge of stocks across the globe <.MIWD00000PUS> gained 1.58% following broad gains in Asia and Europe. The STOXX 600’s banking stock index was up 4.4%, after hitting a fresh all-time low on Friday <.SX7P>.

In morning trading on Wall Street, the Dow Jones Industrial Average <.DJI> rose 422.7 points, or 1.56%, to 27,596.66; the S&P 500 <.SPX> gained 47.91 points, or 1.45%, to 3,346.37; and the Nasdaq Composite <.IXIC> added 163.85 points, or 1.5%, to 11,077.41.

Currency markets indicated increased risk appetite, as the riskier Australian dollar, New Zealand dollar, Swedish crown and Norwegian crown were all up against the U.S. dollar, recouping some losses from the previous week.

The dollar index fell, erasing some of last week’s gains, down 0.4% on the day at 94.157 at 7:54 a.m. EDT (1154 GMT).

Investors remain broadly cautious in light of rising new COVID-19 infections in Europe, which pose the risk of further restrictions on activity.

Benchmark 10-year notes last fell 1/32 in price to yield 0.661%, from 0.659% late on Friday.

Oil prices were mixed as an increasing number of virus cases damaged hopes for a smooth recovery in fuel demand, with the main crude benchmarks on track for their first monthly falls since April.

U.S. crude recently fell 0.05% to $40.23 per barrel and Brent was at $42.20, up 0.67% on the day.

(Reporting by David Randall; editing by Jonathan Oatis)