A global stock market rally continued Wednesday on bright US data, China's stimulus, steadier oil prices and growing hopes of more eurozone monetary policy easing, dealers said.

Shanghai soared almost 4.3 percent, despite news that Moody's has downgraded the outlook on China's sovereign bonds from stable to negative.

Tokyo surged 4.1 percent, driven also by the weaker yen which boosts exporters, and Hong Kong jumped 3.1 percent.

Europe's equities also churned higher with London and Frankfurt both adding 0.1 percent in late morning deals, and Paris up 0.3 percent.

This week's rally was sparked Monday by the People's Bank of China (PBoC), which cut the reserve requirement ratio for banks.

The move is aimed at encouraging lending and stimulating activity in the world's number-two economy, a key driver of global growth.

Further ahead, there are growing expectations of monetary policy easing from the European Central Bank (ECB) next week.

- 'Investor-reassuring cocktail' -

"After a volatile February saw the markets scraping a variety of years-long lows, the recovery ... seems to have stepped up a gear as March has got underway," Spreadex analyst Connor Campbell told AFP.

"It is hard to pinpoint exactly why there has been such a shift in sentiment; however, steps in the right direction from the PBoC in regards to its recent cut, the gradually-steadying situation in oil, and the near-guaranteed action from the ECB next week appear to have combined into an investor-reassuring cocktail, for now at least."

Markets have also been propelled higher by a stream of upbeat data on the United States economy.

Better-than-expected reports on the sluggish US manufacturing sector, construction spending and auto sales showed the world's top economy was still resilient even as global growth sputters.

The bright figures also put the chances of another Federal Reserve rate rise this year back into play.

Russ Mould, investment director at trading firm AJ Bell, added that steadier commodity prices have also contributed to the rally.

"Oil, copper and iron ore have all stopped going down and that has calmed a few nerves about both economic growth and the banks’ exposure to these industries," Mould told AFP.
"In addition, macroeconomic releases have generally met expectations.

"All eyes are now on the big run of central bank meetings slated for this month  -- ECB on the 10th, Bank of Japan on the 15th, Federal Reserve on the 16th and Bank of England on the 17th."

The BoJ had shocked markets in January by unveiling a below-zero interest rate policy as its latest weapon to spur bank lending and drive up inflation.

However, the move was widely panned as desperate, and underscored the challenges facing Prime Minister Shinzo Abe's limping bid to kickstart Japan's economy.

- Key figures around 1100 GMT -

London - FTSE 100: UP less than 0.1 percent at 6,156.0 points

Frankfurt - DAX 30: UP 0.1 percent at 9,727.40

Paris - CAC 40: UP 0.3 percent at 4,421.70

EURO STOXX 50: UP 0.5 percent at 3,011.50

Tokyo - Nikkei 225: UP 4.1 percent at 16,746.55 points (close)

Shanghai - composite: UP 4.3 percent at 2,849.68 points (close)

Hong Kong - Hang Seng: UP 3.1 percent at 20,003.49 points (close)

New York - Dow: UP 2.1 percent at 16,865.08 points (close)

Euro/dollar: UP at $1.0868 from $1.0867 on Tuesday

Dollar/yen: UP at 114.33 yen from 113.94 yen