LONDON/NEW YORK An index of global shares steadied on Monday as investors weighed US President Joe Biden's decision to end his re-election bid over the weekend, while a surprise rate cut by China's central bank failed to boost Asian markets.

Biden announced on Sunday he would drop out of the US presidential election race and endorsed Vice President Kamala Harris for the Democratic ticket to challenge former President Donald Trump, who is the Republican nominee.

Markets took the news in stride, with MSCI's gauge of stocks across the globe up 0.75% at 816.92. The index fell 2.1% last week in its worst weekly performance since April.

"I think largely the Biden bailing out was priced in; we just needed definitiveness on that," said Lou Basenese, the president and chief market strategist of MDB Capital in New York. "Now you are seeing the Trump trades, more risk taking, and small-caps, going long oil and gas, and bitcoin really returning to the market," he added.

The dollar was slightly higher against a basket of currencies, capturing some safe-haven flows, while bitcoin - which has tended to be a beneficiary of any growing chances of a return of Trump to the White House - steadied after having fallen on Sunday following Biden's announcement.

The dollar index gained 0.1% to 104.32, with the euro up 0.07% at US$1.0885. Bitcoin, which hit six-week highs last week in its strongest weekly rally since February, traded on a more even keel on Monday, up 1.76% at US$68,158 .

On Wall Street, all three major indexes finished higher, led by gains in technology and communication services stocks. Nvidia ended up nearly 5%, buoyed by news it is working on a new artificial intelligence chip for the Chinese market.

The Dow Jones Industrial Average rose 0.32% to 40,415.44, the S&P 500 gained 1.08% to 5,564.41, and the Nasdaq Composite gained 1.58% to 18,007.57.

Investors will be eyeing a packed week of corporate earnings. Tesla and Google parent Alphabet kick off the season for the "Magnificent Seven" megacap group of stocks.

US Treasuries were little changed as markets assessed the uncertainly surrounding the race for the White House, with yields on benchmark US 10-year notes adding 1.7 basis points to 4.256%. Markets are fully pricing in the prospect of a rate cut by the Federal Reserve in September, which has helped underpin risk appetite.

"The withdrawal of President Biden from the race, I don't think is going to have any impact on the market because whether it's Kamala Harris or somebody else, the policies are going to be the same," said David Spika, the chief markets strategist of Turtle Creek Wealth Advisors in Dallas.

"The market's growing today because big tech is back. We saw a couple of weeks in a row where there was a rotation out of the big tech names into small caps and values and cyclicals, which actually was very healthy," he added.

Europe's biggest banks also report this week, with eyes on whether the gains from higher interest rates have run out of steam and if recent political drama is weighing on sentiment. The STOXX 600 finished up 0.93%.

The People's Bank of China cut short-term rates by 10 basis points, which pulled down long-term borrowing costs and bond yields. The move follows Beijing's release of a policy document on Sunday outlining its ambitions for the economy. MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.61%.

Oil prices fell for a second consecutive session amid rising stockpiles and signs of weak demand. Brent crude futures fell 0.3% to settle at US$82.40 per barrel, the lowest since June 11. US West Texas Intermediate crude futures for August delivery expired on Monday after falling 35 cents to US$79.78 a barrel, also a one-month low.

Gold prices fell to more than a one-week low. Spot gold lost 0.07% to US$2,398.32 an ounce. US gold futures gained 0.28% to US$2,402.10 an ounce.

  - Reuters