LONDON: A jump in Chinese factory activity despite the virus-hit global economy helped keep equities markets bubbling higher, but oil prices failed to rebound convincingly from 18-year lows.

Asia stocks picked up the baton from a rally Monday that saw all three of Wall Street’s main indices jump more than three per cent.

That carried over into Europe and back to New York, although gains were more modest.

“The release of Chinese PMI data overnight provided some reason for optimism, with a sharp rebound back into expansion lifting spirits ahead of the European session,” said market analyst Josh Mahony at online trading firm IG.

China’s manufacturing sector saw surprise growth in March, having been mauled in February as the country went into lockdown to tackle the virus.

China’s Purchasing Managers’ Index, a key gauge of factory activity, jumped to 52.0 from a record low 35.7 the month before. Any figure above 50 is considered growth.

China is slowly returning to a semblance of normal life after months of tough restrictions that confined millions of people at home and brought economic activity to a near standstill.

A strong and quick recovery of Chinese output would help boost demand for energy.

But European benchmark Brent crude began to fall once again, although the main US contract, WTI, was still up over 2pc.

An ongoing price war between Russia and Saudi Arabia has also put downward pressure on prices.

Published in Dawn, April 1st, 2020