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World stock markets rebounded on Tuesday as Turkey’s lira pulled out of a recent nosedive and reassuring data from Germany helped offset the latest wobbles in China’s giant economy.

After three weeks of heavy pounding, the lira got some respite as signs Turkish authorities were trying to address the unresolved damage triggered an almost 5-per-cent relief rally to about 6.5 per dollar.

Still, the currency lost almost 10 per cent on Monday and nerves were briefly tested again as President Tayyip Erdogan urged Turks to boycott U.S. electronic products in response to recent criticism from Washington.

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“I don’t believe it’s all over,” said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California. “We are just getting a bit of reprieve from the recent down move.”

Canada’s main stock index climbed on Tuesday as higher oil prices lifted energy stocks and concerns around Turkey’s currency crisis receded.

At 11:30 a.m. ET,, the Toronto Stock Exchange’s S&P/TSX composite index was up 50.69 points, or 0.32 per cent, to 16,302.02..

Nine of the index’s 11 major sectors were trading higher.

The financials sector supported the main index with a 0.7-per-cent rise. Toronto-Dominion Bank, Manulife Financial Corp and Royal Bank of Canada added between 0.3 per cent to 1.5 per cent and led the financial index higher.

The energy sector rose 0.3 per cent, with boost from nearly 1-per-cent gain in Suncor Energy and Imperial Oil.

The materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.3 per cent. Gold prices eased slightly but hovered at 18-month lows.

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Canopy Growth Co. was down 6.5 per cent as marijuana producers lead health care stocks lower.

Home Capital Group fell 7.7 per cent after the Canadian lender issued its second-quarter report.

The Turks have exhausted the possibility of interest rate hikes and are backed into a corner by their inadequate level of currency reserves, Paul McNamara, emerging markets investment director at GAM Investment Management in London, said in a note.

A much-needed demand slowdown in Turkey is causing asset quality problems in banks, he said. The role of construction in the Turkish economy, for example, is comparable to that in Spain or Ireland ahead of the European bust a decade ago, he said.

MSCI’s gauge of global equity markets halted a four-day slide to rise 0.28 per cent, while Japan’s Nikkei jumped 2.28 per cent in its biggest one-day gain since March.

European shares steadied after a two-day selloff as concerns about contagion from Turkey’s currency crisis eased. The pan-regional FTSEurofirst 300 index edged up 0.01 per cent and the benchmark STOXX 600 slid 0.03 per cent.

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Data showing the region’s largest economy, Germany, picking up more steam than expected in the second quarter helped sentiment in Europe, though the markets’ bounce might have been bigger had Chinese economic surveys not disappointed.

Investment growth slowed to a record low while industrial output and retail sales both missed expectations.

The downdraft for emerging market currencies stopped, with the South African rand, Russian ruble, Brazilian real and Mexican peso, a proxy for emerging market currencies, all rising.

Still, MSCI’s emerging markets index for equities fell to its lowest since July 2017.

Stocks on Wall Street rallied. The Dow Jones Industrial Average rose 121.53 points, or 0.48 per cent, to 25,309.23. The S&P 500 gained 17.09 points, or 0.61 per cent, to 2,839.02 and the Nasdaq Composite added 39.60 points, or 0.51 per cent, to 7,859.31.

The euro fell, hitting 13-month lows against the dollar and Swiss franc, as traders fretted over the exposure of European banks to Turkey.

The dollar index, tracking it against a basket of major currencies, rose 0.02 per cent, with the euro down 0.26 per cent to $1.1378. The Japanese yen weakened 0.15 percent versus the greenback at 110.93 per dollar.

Oil prices jumped after Saudi Arabia said it cut production, adding to concerns about global supply as U.S. sanctions against Iran bite its exports.

U.S. crude rose 80 cents to $68.00 a barrel and Brent gained 81 cents to $73.42.

Reuters

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