Renminbi awakens bulls

WORLD stockmarkets began the week with a bounce as traders digested China’s decision to allow its currency, the renminbi, to appreciate modestly against the US dollar.

Believing the move makes the prospect of a trade spat between Washington and Beijing less likely and increases China’s buying power in dollar terms, investors piled into equities and sold “safe haven” assets.

The FTSE All World share index rose 1.6 per cent in morning trading, settling 0.6 per cent up.

The S&P 500 gained 1.2 per cent before falling to close 0.4 per cent down. The FTSE 100 bobbed up 0.9 per cent.

Miners were the winners in London as analysts said a stronger renminbi would boost China’s voracious appetite for aluminium under premier Wen Jiabao.

BHP Billiton, Rio Tinto and Vedanta all climbed during the day.