MercoPress. South Atlantic News Agency

World markets and Euro boosted by China’s supportive comments

China Investment Corp. President Gao Xiqing

World stock markets soared strongly on Thursday, boosted by supportive comments from China on the strength of the Euro. The agency that manages the country's huge foreign assets said it was not rethinking its holdings in Euros.

That led to a positive day's trading and left shares in all key markets with good gains.

London's main FTSE index was up 3.1%, France's Cac was 3.4% higher and the German Dax was up 3.1%. At the close in New York, the Dow Jones was 2.85% higher and rebounded above the 10.000 landmark.

The Euro also rose to trade at $1.236, a rise of almost two cents on the day.

Reports that China was reviewing its investments in the light of the weakness in the Euro zone gave markets a fright late on Wednesday.

The make-up of China's estimated overseas assets of 2.5 trillion USD are a state secret and although most of them are in US dollars, a significant proportion - estimated at 630 billion are thought to be held in Euros.

A sell-off from China would not only highlight the fragility of the Euro zone, but also depress the market by increasing supply at a time of low demand. Earlier on Thursday, Japan's main market also closed with a gain of 1.2%.

“Europe has been, and will be one of the major markets for investing China’s exchange reserves” the State Administration of Foreign Exchange said in a statement on its website Thursday.

The official Xinhua News Agency reported China Investment Corp. President Gao Xiqing said Wednesday Europe’s turmoil “hasn’t had too big of an impact” on CIC’s investment decisions.

From the US Federal Reserve Bank of St. Louis President James Bullard said Europe’s debt crisis is likely to be contained within the region as the recovery in the US and Asia protects them from contagion. Former Bundesbank President Helmut Schlesinger said the Euro slide hasn’t left it at an unnaturally low and the breakup of the 16-nation currency is out of the question.