MANILA: Dalian iron ore recouped from a selloff in the previous session to rise 5% on Thursday, as the dollar eased, although concerns over a global recession and new COVID-19 restrictions in China persisted.

Asian stocks managed gradual gains on Thursday as investors grappled with the risks of a recession and a potential pause in interest rate hikes, while the euro traded at a two-year low and oil began to claw back overnight losses.

“The thing about commodities these days given the large drop off in liquidity as signalled by the fall in open interest is inter-day moves tend to get exaggerated as liquidity pockets aren’t as deep as when the market was in a rally party mood,” said Stephen Innes, managing partner of SPI Asset Management.

“The question is will the move stick and extend further. While dovish leaning monetary policy should support economic growth. But we always end back in the negative feed back loop that tighter COVID measures could return.” The most-traded iron ore on the Dalian Commodity Exchange finished 3.9% higher at 756.50 yuan ($112.82) a tonne and August contract on the Singapore Exchange gained 1.7% at $113.50 a tonne.

Dalian iron ore has fallen for four sessions out of six. Coking coal rose 2.7% and coke jumped 3.2%. The dollar eased 0.2% after scaling a 20-year peak against its rivals, making greenback-denominated metals slightly less expensive for other currency holders.

The head of the International Monetary Fund (IMF) on Wednesday said the outlook for the global economy had “darkened significantly” since April and she could not rule out a possible global recession next year given the elevated risks.

China is fighting nascent COVID-19 flare-ups across the country with mass testing and fresh restrictions, including in weary Shanghai where new cases have been linked to a building which houses a karaoke lounge that was operating illegally.