US and European equity gauges are firm and oil prices are extending recent gains as the latest rally in risk assets continues.

However, pockets of caution are evident, with perceived haven assets such as gold, treasuries and the yen also stronger.

The pan-European Stoxx 600 is up 1.5 per cent and Germany’s Dax is adding 1.5 per cent after Asian bourses posted mixed results.

Japan’s Nikkei 225 dipped 1.4 per cent, the Shanghai Composite added 1.1 per cent and Hong Kong’s Hang Seng shed 1 per cent.

US index futures suggest the S&P 500 will add 6 points to 1,902. The Wall Street stock benchmark, and global sentiment barometer, by close on Tuesday had rebounded 4.8 per cent from the 2-year intraday low touched late last week.

That rally came partly on the back of “bargain hunting” in recently battered financials, but also a bounce in commodity assets as the oil price surged on hopes a meeting in Doha between important crude producers could lead to output cuts designed to tackle a global glut.

The deal agreed between Russia, Saudi Arabia, Venezuela and Qatar was to freeze oil output at January’s level, and even then only if they are joined by other big producers.

Capital Economics noted that even if output from Opec and Russia were capped at its January level, "this would still be exceptionally high".

“In other words, this deal would simply maintain the excess supply that is now in place. This might be better than a further increase, but it is not the output cuts that some in the markets have been hoping for,” they said.

The deal is thus seen as largely symbolic, and there are concerns other key producers might prove a stumbling block.

Analysts at National Australia Bank noted that Iran and Iraq have both stated their intention to boost oil output.

“Talks are expected to continue in Tehran today and tomorrow, but scepticism remains that a meaningful agreement will be reached. If these talks only serve to highlight tension between producers, then they may end up creating more uncertainty than any good,” NAB analysts added.

However, after early weakness on Wednesday, the energy sector is again on the front foot. Brent crude, the international benchmark, which just before the Doha deal was announced had been trading above $35.50 a barrel, is adding 3.2 per cent on the day at $33.20. West Texas Intermediate, the US marker, is up 2.9 per cent to $29.90.

Sentiment across Asia was damaged by renewed falls for China’s currency as the People’s Bank of China set the daily reference rate around which the renminbi is allowed to trade weaker by 0.16 per cent to Rmb6.5237 per US dollar.

It was the renminbi fix’s biggest weakening since January 7, the final session in the eight-day depreciation streak that rocked global financial markets because of fears it signalled capital flight amid a sharp slowdown for the world’s second-biggest economy.

The renminbi’s drop triggered a rise in the Japanese yen, which had been softer in early trade after data showed that the country’s machinery orders - a popular proxy for private capital expenditure - fell 3.6 per cent year-on-year in December, their fastest pace of decline in a year.

But in European trading the yen is 0.1 per cent stronger at Y114.20 per dollar, and because the USD/JPY rate is closely watched as an inverse proxy for risk appetite, the move is supporting the broader market’s bullish sentiment.

Some traders remain cautious, however, with supposed havens in demand. Gold is up $2 to $1,202 an ounce and government bond yields, which move opposite to the asset price, pushing lower.

The 10-year German Bund yield is easing 1 basis point to 0.25 per cent and equivalent maturity Treasuries are off 1bp to 1.77 per cent.

The euro is 0.1 per cent weaker at $1.1127 and sterling is up 0.1 per cent to $1.4323 as “Brexit” concerns continue to weigh.

Copyright The Financial Times Limited 2016