Markets boosted as China reassures on Eurozone assets

Steve Dinneen
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THE euro staged a broad rally andUS stocks jumped about three per ceyesterday after China said Europe remains a key investment market for its foreign-exchange reserves.

The People’s Bank of China said a Financial Times report that Beijing was concerned about its Eurozone bond holdings due to the European debt crisis was groundless. The report had driven the euro to a near four-year low on Wednesday and cut short a rally in US stocks.

The pan-European FTSEurofirst 300 index closed up 2.9 per cent at 1,000.46 points, for the first time in just over a week while government debt prices fell as the bid for safety ebbed. The Dow Jones industrial average gained 284.54 points, or 2.85 per cent, to 10,258.99.

The euro gained 1.67 per cent at $1.237.

“Getting some assurance that Chinese sales of European sovereign debt isn't imminent is making everyone feel better,” said Douglas Peta, an independent market strategist in New York.