Stock markets surge for second day running after Black Monday losses

Markets worldwide enjoy better fortunes as Chinese government buys shares to prop up prices and US Federal Reserve suggests it may defer interest rate rise

Global stockmarkets surged for a second day yesterday, recovering most of the losses they suffered in Monday's crash after the Chinese authorities bought shares to prop up prices and figures showed US growth surging ahead. The mood was helped by signals from the US central bank on Wednesday that it was unlikely to raise interest rates if the turmoil continued for much longer.

The Shanghai stock market gained 5.3%, its biggest gain for eight weeks, to continue a global rally that has ended two weeks of relentless selling leading up to China's Black Monday this week. Yesterday Britain's blue chip companies gained 60bn as the FTSE 100 index climbed 3.6% to 6192. The one-day rise was the sharpest in percentage terms since October 2011. European exchanges finished more than 3% higher and at 18.00 BST the Dow Jones in New York was up 2.2% at 16,641.

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