08/27/2015 05:11 EDT | Updated 08/27/2016 01:12 EDT

TSX and Dow charge higher as market gloom over China dissipates

North American stock markets followed China's lead higher on Thursday, moving up sharply through the day.

The S&P/TSX Composite Index was poised for its best one-day performance since 2011, up 412 points in the afternoon to 13,792.

Much of the TSX's exuberance came from oil prices, which gained more than nine per cent or more than $3 to trade at $42.18 US a barrel. Oil's run from $39 to $42 in a day would be the best one-day performance for crude since 2012.

The loonie was also higher, up about half a cent to 75.67 cents US.

There was a similarly good mood in New York with the Dow Jones following up its 500-point day on Wednesday with another 350-point gain on Thursday. Late in the trading day, the Dow was at 16,627.

North American markets were following the lead of stock bourses in Asia, including China's main stock index which surged 5.3 per cent Thursday, its biggest gain in eight weeks, as markets across Asia advanced in the wake of Wall Street's rebound, giving investors some relief after gut-wrenching global losses.

The Shanghai Composite Index posted its first gain in six days to close at 3,083.59 points, bouncing back from losses that triggered worldwide selling and wiped nearly 23 per cent off its value over the past week. It was the biggest one-day increase since June 30.

Elsewhere in Asia, Hong Kong's Hang Seng rose 2.9 per cent to 21,697.31 and Tokyo's Nikkei 225 added 1.1 per cent to 18,574.44. Sydney's S&P ASX 200 advanced 1.2 per cent to 5,233.30 and Seoul's Kospi gained 0.7 per cent to 1,908.00. Markets in India, Singapore, Bangkok, New Zealand and Jakarta also rose.

European markets also advanced. France's CAC-40 increased 2.1 per cent to 4,597.36 and Germany's DAX gained 2.4 per cent to 10,240.92.

The gains came after Wall Street rocketed up Wednesday, when the Dow Jones industrial average soaring more than 600 points, or 4 per cent. That was its third-biggest point gain of all time and its largest since Oct. 28, 2008.

Traders were encouraged by comments from William Dudley, president of the New York Federal Reserve Bank, that the case for a U.S. interest rate hike in September is "less compelling" given China's troubles, falling oil prices and emerging markets weakness.

As Fed officials prepare for their annual meeting in Jackson Hole, Wyo., "people are looking for insight on what's really going to happen on interest rates," said Andrew Sullivan, a trader at Haitong Securities in Hong Kong.

Following a six-year run-up in U.S. stocks that has pushed major indexes to all-time highs, investors worry the economy could falter if the Fed raises rates too soon.

The rebound also is driven by bargain-hunting after prices were beaten down over the past few days, said Sullivan.

"You've seen everything just bounce back today," he said. "The real question is now whether you get the fundamental players coming back in."

It might be too early to expect a long-term Chinese rebound, cautioned Huang Cengdong of Sinolink Securities in Shanghai. Worries about China's economic outlook have risen after July exports shrank by an unexpectedly wide margin and August manufacturing weakened.

"Considering the weakening economic outlook, the rally gains won't last long," Huang said.