Global equities won solid gains on Thursday, led by Wall Street, which was buoyed by the Federal Reserve's indication it could soon unwind its huge emergency stimulus.

Stocks have won back ground from last week's sharp falls thanks also to easing concerns over troubled Chinese property giant Evergrande.

Equities had tumbled over fears that the group could collapse, leading to a crisis that would be felt in global markets.

The three major US indices gained for the second straight day, with the Dow winning 1.5 percent.

Ratings agency Fitch nonetheless cut its growth forecast for China's economy this year, citing a slowdown in the country's colossal property sector.

JJ Kinahan, chief market strategist at TD Ameritrade, said investors were less worried about Evergrande compared with earlier in the week, but he said volatility could return as the situation plays out.

"When you have these types of big stories, they tend to come back," Kinahan said. "So I wouldn't say that situation is over."

But traders' focus remained firmly on central banks, with the Bank of England keeping rates and stimulus measures in place at its own meeting Thursday.

The US Fed on Wednesday said it expects to "soon" be ready to start tapering the bond buying program put in place at the start of the pandemic -- a key driver of the global economic and equity rebound.

The Fed "at least started to talk a little bit more in timeframes," Kinahan said.

"And you know, the Fed still remains the number one story, so any clarity you get from them is looked upon very favorably."

Markets so far have not turned their attention to the brewing trouble in Congress, where Republican opposition to raising the US debt limit could torpedo an effort to pass a temporary budget bill, all of which could cause a government shutdown after September 30.

Fed chief Jerome Powell warned US lawmakers to lift the borrowing cap to avoid the government running out of cash and facing a debt default that could spark a financial crisis.

In Europe, markets mostly rose although London was flat, while the pound also gained.

Early business activity data for the region show "manufacturing and services sector growth in both the UK and Eurozone slowing but remaining comfortably in expansion territory," Charles Schwab analysts said.

Nevertheless, "the Delta variant (of coronavirus) and supply chain challenges continue to fester."

In Asia, Hong Kong closed up more than one percent, with Evergrande's share price surging by around one quarter.

Federal Reserve boss Jerome Powell urged US lawmakers to lift the debt ceiling to avoid a default that many warn could have devastating economic consequences Federal Reserve boss Jerome Powell urged US lawmakers to lift the debt ceiling to avoid a default that many warn could have devastating economic consequences Photo: AFP / Nicholas Kamm

New York - Dow: UP 1.5 percent at 34,764.82 (close)

New York - S&P 500: UP 1.2 percent at 4,448.98 (close)

New York - Nasdaq: UP 1.0 percent at 15,052.24 (close)

London - FTSE 100: DOWN less than 0.1 percent at 7,078.35 (close)

Frankfurt - DAX: UP 0.9 percent at 15,643.97 (close)

Paris - CAC 40: UP 1.0 percent at 6,701.98 (close)

EURO STOXX 50: UP 1.1 percent at 4,194.92 (close)

Hong Kong - Hang Seng Index: UP 1.2 percent at 24,510.98 (close)

Shanghai - Composite: UP 0.4 percent at 3,642.22 (close)

Tokyo - Nikkei 225: Closed for a holiday

Euro/dollar: UP at $1.1736 from $1.1696 at 2100 GMT

Pound/dollar: UP at $1.372 from $1.3620

Euro/pound: DOWN at 85.53 pence from 85.84 pence

Dollar/yen: UP at 110.26 yen from 109.80 yen

Brent North Sea crude: UP 1.4 percent at $77.23 per barrel

West Texas Intermediate: UP 1.4 percent at $73.25 per barrel