A FIGHTBACK by global markets continued yesterday as sentiment improved in the wake of reassurances from China’s central bank.

The FTSE 100 Index rallied 72 points on Tuesday and was up another 63.6 points to 6165.5 yesterday, after positive trading in Asia and Wall Street on the back of receding fears of a credit crunch in the world’s second biggest economy.

Germany’s Dax and France’s Cac 40 index were were also sharply higher with gains of 1.7 per cent and two per cent respectively.

As well as reassurances from China’s central bank that liquidity is being monitored and remains ample, a surprise fall in first-quarter growth in the US helped underpin markets.

While US output was revised sharply lower to 1.8 per cent from an earlier estimate of 2.4 per cent, weaker growth had the converse effect of boosting markets, as it could delay the US Federal Reserve’s plans to wind down its quantitative easing scheme.

A stronger dollar meant more pain for holders of gold, with the price of the precious metal at a level not seen since 2010.

Yesterday’s decline of more than three per cent to about $1,234 (£805) an ounce was reflected in the FTSE 100’s commodities firms, with Fresnillo down 32p to 866.5p, Randgold Resources down 125p to 3972p and Anglo American off 43p to 1256p.

Insurance stocks were on the front foot, with Prudential up 2.7 per cent or 28p to 1059p and Aviva 6.6p higher at 336.2p. Legal and General rose 3.5p to 169.1p after it bolstered its retirement arm with the acquisition of closed annuity fund Lucida in a deal worth £150m.

Persimmon was 25p higher at 1161p in the FTSE 100 Index, while Taylor Wimpey added 3.95p to 94.95p and Barratt Developments improved 13.6p to 307.4p.