GLOBAL MARKETS-World stocks rise, dollar treads water

                                
 (Adds U.S. trading)
                                
 * IMF inaction means emerging assets still in favor
                                
 * Stocks rise, dollar slips
                                
 * U.S. bonds, Japan markets closed for holidays
                                
 By Jeremy Gaunt and Al Yoon
                                
 LONDON/NEW YORK, Oct 11 (Reuters) - World stocks rose and
the dollar was flat on Monday as investors bet on further asset
buying by the U.S. Federal Reserve and a continuation of global
currency flows toward emerging markets.
                                
 The dollar slid to a 15-year low against the yen <JPY=> and
weakened slightly against the euro <EUR=>. Japanese markets and
U.S. bond markets were closed for holidays.
                                
 Finance policymakers meeting over the weekend in Washington
produced no quick fix for global economic imbalances, providing
no barriers to the cheap money trade of selling dollars to buy
emerging market assets and commodities.
                                
 Reflecting this, MSCI's main emerging market stock index
<.MSCIEF> climbed half a percent for a nearly 12 percent
year-to-date gain. JPMorgan's EMBI+ index <11EMJ> showed
investors snapping up emerging market government debt.
                                
 Both moves are continuations of massive flows into emerging
markets in a bid for the faster growth and higher yields than
are available in developed economies.
                                
 EPFR Global said in its latest flow report at the end of
last week that emerging market equity fund flows had hit a
33-month high and emerging bond funds had absorbed more than $1
billion in a week.
                                
 "It is increasingly being seen as the trade for all
seasons," said David Shairp, global strategist at JPMorgan
Asset Management.
                                
 Friday's U.S. jobs data, which was worse than expected,
raised expectations that the Fed will buy more assets under its
quantitative easing (QE) program, essentially trying to pump up
the ailing U.S. economy by printing more money.
                                
 This generally drives investments out of dollar assets and
toward higher-yielding ones.
                                
 But Shairp reckons many in the markets also see the flow
patterns continuing even if there is no new QE, with investors
betting on higher growth abroad than in the U.S. economy.
                                
 The Dow Jones industrial average <.DJI> was up 4.88 points,
or 0.04 percent, at 11,011.36. The Standard & Poor's 500 Index
<.SPX> was up 1.04 points, or 0.09 percent, at 1,166.19. The
Nasdaq Composite Index <.IXIC> was up 4.95 points, or 0.21
percent, at 2,406.86.
                                
 EUROPE ALONE
                                
 In Europe, the FTSEurofirst 300 <.FTEU3> gained 0.3 percent
-- taking the year-to-date gain up to around 2.5 percent -- as
traders anticipated the U.S. stimulus.
                                
 "The market is clearly expecting quantitative easing and
has priced that in," said Richard Lacaille, global chief
investment officer at State Street in London. "The (U.S.) data
continue to be as expected, part of a slow recovery."
                                
 Attention was also building on the upcoming earnings
season. Intel <INTC.O> and JP Morgan <JPM.N> are among
companies reporting later in the week.
                                
 In currency markets, the dollar recouped some losses but
was trading little changed against a basket of major currencies
<.DXY>. Traders booked gains on bearish dollar bets.
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
  Graphics on the global currency trade, see:
http://r.reuters.com/gez77p
                                
 http://r.reuters.com/jec96p
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 The dollar and equities have been inversely correlated as
investors leave the perceived safety of the greenback to put
money into equities. For details, see [ID:nN11137639]
                                
 "We've seen it for a while, since mid-September, the dollar
sliding in value on the high likelihood that we will see more
quantitative easing coming out of the Fed," said Tim Ghriskey,
chief investment officer at Solaris Asset Management in Bedford
Hills, New York.
                                
 "And we will continue to see that expectation until the Fed
actually does something and states that they are done, at
least, for the time being."
                                
 The euro <EUR=> fell 0.25 percent to $1.3905, while the
dollar <JPY=> rose 0.13 percent to 82.01 yen.
                                
 The dollar earlier sank as low as 81.36 yen, triggering
another round of speculation about possible intervention by
Japan to weaken the yen.
 (Additional reporting by Neal Armstrong and Brian Gorman in
London; Editing by Dan Grebler)