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GLOBAL MARKETS-Central bank liquidity, growth lift shares, oil
August 1, 2013 / 2:16 PM / 4 years ago

GLOBAL MARKETS-Central bank liquidity, growth lift shares, oil

* Europe’s central banks follow Fed in leaving policy unchanged

* Official Chinese data and euro zone PMIs point to growth

* Dollar up from six-week lows as euro dips

* European shares higher, oil near $109 a barrel

NEW YORK, Aug 1 (Reuters) - Shares, the dollar and crude oil all climbed on Thursday as central banks in the euro zone and Britain joined the Federal Reserve in leaving in place policies supportive of the tentative recovery in the global economy.

The European Central Bank and the Bank of England both ended policy meetings by leaving rates at record lows, a day after the Fed said the U.S. economy still needed its support and avoided any mention of a change to its stimulus measures.

The promise of abundant liquidity came as data for July revealed industrial activity picking up in the euro zone for the first time in two years, greater stability in China’s vast factory sector and a surge in British production.

U.S. manufacturing grew in July at its quickest pace in four months as output and new orders increased and firms took on more workers, an industry report showed on Thursday.. A separate showed manufacturing growth was at its highest in two years.

“After a choppy and erratic session yesterday, failing to break above 1,700 (on the S&P500 stock index), the market is taking some positive China data along with leads from Europe to put on an impressive early morning session,” said Andre Bakhos, director of market analytics at Lek Securities in New York.

The Dow Jones industrial average was up 140.26 points, or 0.90 percent, at 15,639.80. The Standard & Poor’s 500 Index was up 17.70 points, or 1.05 percent, at 1,703.43. The Nasdaq Composite Index was up 36.97 points, or 1.02 percent, at 3,663.34.

The better outlook encouraged investors back into riskier assets, lifting MSCI’s world equity index 1 percent, sparking a rally in major euro zone government bonds and sending U.S. crude up 2.4 percent to $107.59 a barrel .

The dollar index, which tracks the greenback’s performance against a basket of major currencies, gained 0.8 percent to 82.124, though still not far from a six-week low touched on Wednesday after the Fed’s policy announcement.

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