A jump in the price of oil and the promise of more government stimulus to ease the economic pain inflicted by the coronavirus pandemic helped global equity markets surge on Wednesday, prompting investors to edge out of perceived safe-haven assets like US Treasuries.

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US crude and Brent both rose more than 7 percent after touching their lowest levels since 1999 on the prospects for further production cuts to reduce the glut in the oil market.

MSCI's gauge of stocks across the globe gained 1.76 percent following a broad rally in Europe and slight losses in Asia.

On Wall Street, the Dow Jones Industrial Average rose 450.7 points, or 1.96 percent, to 23,469.58, the S&P 500 gained 62.14 points, or 2.27 percent, to 2,798.7 and the Nasdaq Composite added 232.15 points, or 2.81 percent, to 8,495.38.

A historic two-day plunge in the oil market, which sent futures contracts negative for the first time in history, had erased more than 1,000 points from the Dow before Wednesday's open.

Better-than-expected US corporate earnings helped lift equities, said Daniel Morris, senior investment strategist at BNP Paribas Asset Management.

"Markets do seem to have recovered too far, too quickly, given the uncertainty about the depth and duration of the downturn and a correction is still probable," said Morris.

"But if the negative sentiment reflected in gold and bond yields turns out to be overdone, and the fall in GDP is less than the most extreme estimates indicate, valuations are not unreasonable."

The US Congress will pass a nearly USD 500 billion coronavirus aid bill on Thursday, House Speaker Nancy Pelosi said, that includes an additional USD 321 billion for a previously set-up small business lending program that quickly saw its funds exhausted.

"Though this bill will address some of the shortfalls, this will not likely be the end for stimulus," according to a note from BofA Global Research, adding that the firm expects Congress to pass another large package worth up to USD 1.5 trillion.

Gains in the oil market helped draw investors into riskier assets, pulling government bond yields higher. Benchmark 10-year notes last fell 17/32 in price to yield 0.6222 percent, from 0.571 percent late on Tuesday.

European Union leaders will meet on Thursday to discuss measures to increase aid to help the region cope with the coronavirus outbreak.

Traders were also buoyed after Italy breezed through a major debt sale on Tuesday and speculation continued that the European Central Bank would provide more support measures.

US crude recently rose 20.05 percent to USD 13.89 per barrel and Brent was at USD 20.70, up 7.09 percent on the day.

First Published:Apr 23, 2020 7:16 AM IST