World stocks kicked off September on a stronger note on Wednesday as data showed a manufacturing rebound in China and stronger-than-expected growth in Australia, while the yen held near recent 15-year peaks against the dollar.
China's manufacturing sector staged a moderate rebound in August after slowing for several months while Australia's economy grew at the fastest pace in three years last quarter.
The strong readings from Asia helped offset concerns that the U.S. economy is slowing to an extent that would force the Federal Reserve to embark on a policy of unconventional easing.
After what could be considered a washout August, September is starting with a flourish, said Ben Potter, research analyst at IG Markets. The MSCI world equity index <.MIWD00000PUS> rose 0.3 percent, moving further away from a seven-week low hit last week. The benchmark index is still down nearly seven percent since January.
The Thomson Reuters global stock index <.TRXFLDGLPU> rose a third of a percent.
In Europe, the FTSEurofirst 300 index <.FTEU3> gained 0.2 percent, led by mining shares such as Anglo American
Emerging stocks <.MSCIEF> added 0.6 percent while U.S. crude oil rose 0.4 percent to $72.19 a barrel. German government bond futures fell 8 ticks.
The dollar <.DXY>, which still tends to suffer when investors buy into more riskier assets and currencies, lost 0.4 percent against a basket of major currencies.
Conversely, bearishness about the U.S. economy itself is also weighing on the dollar, with minutes of the Fed's Aug 10 meeting showing the central bank would consider additional easing steps if the outlook weakened appreciably.
The meeting was held against a darkening backdrop, and the Fed, in a significant policy shift, decided to reinvest maturing mortgage-related securities in government debt so its support for the stumbling recovery did not fade.
We've seen a reprieve for risk from the data overnight but I'm of the opinion you sell rallies in riskier currencies. said Kenneth Broux, markets strategist at Lloyds Banking Group.
The market will keep buying safe havens such as the yen and the Swiss franc if U.S. data continues to disappoint.
The yen rose 0.1 percent to 84.09 per dollar, around half a yen away from last week's 15-year high of 83.58. The euro gained 0.3 percent to $1.2727.
(Additional reporting by Atul Prakash; editing by Patrick Graham)