* Stocks bounce back after losses on China data
* Euro rises against dollar
* German, Portuguese debt sales in focus
* Investors eyeing policymakers
By Jeremy Gaunt, European Investment Correspondent
LONDON, Dec 1 (Reuters) - Signs of robust economic growth in
China helped lift world stocks on Wednesday while the euro
halted its recent slide with investors looking for the next move
by policymakers to tackle the euro zone's debt crisis.
Better-than-expected Chinese factory data in November, with
the official Chinese purchasing managers' index (PMI) rising to
a seven-month high of 55.2, showed health in one of the world's
largest economic engine, lifting sentiment. []
European shares rose nearly 1 percent and Japan was half a
percent higher.
But serious concerns remained about the pressure on euro
zone debt and the methods by which it might be eased.
On European bond markets themselves, demand for German debt
fell ahead of a five-year bond sale, although yield spreads with
peripherals such as Spain were slightly tighter.
Debt-ridden Portugal will issue 500 million euros in
12-month T-bills and is likely to pay a new record premium since
the introduction of the euro in a fresh sign of market pressure
to follow Ireland and Greece to seek a bailout.
Standard & Poor's warning on Tuesday that it could cut
Portugal's credit ratings if growth prospects weakened further
was having little impact. []
The agency also said it could act if private creditors
become subordinated to public creditors in a possible aid
programme.
There were also signs that the euro zone debt crisis was
raising concerns among global policymakers. G20 deputy finance
ministers discussed "the financial situation in Europe" on
Monday in a teleconference, a senior G20 source in Asia said.
The source told Reuters the group discussed what could be
done on the part of the G20, but declined to elaborate.
The euro bounced back from recent lows to stand above $1.30
<EUR=>, up around three quarters of a percent.
Analysts cautioned, however, that pressure could return
quickly, especially if peripheral yield spreads began to widen
again or if bond auctions were poor.
"You really need some aggressive action from the authorities
in Europe to try and calm nerves and that's really the key at
this stage," said Greg Gibbs, a strategist at RBS in Sydney.
The extent of the damage to bond holders was underlined by
new Citi bond returns data showing euro zone bonds lost 2.69
percent in November, with Ireland tumbling more than 11 percent,
Spain more than 7 percent and nearly Portugal 5.8 percent.
STOCKS REBOUND
The Chinese data lifted risk appetite on stocks markets.
Although some countries fear Chinese policy tightening if the
economic is deemed to be rising too fast, good growth in China
is typically a booster for export-oriented companies.
MSCI's all-country world stocks index <.MIWD00000PUS> was up
0.6 percent and its emerging market counterpart <.MSCIEF> gained
a solid 1.3 percent.
European stocks also rose sharply with the FTSEurofirst 300
<> gaining 0.9 percent.
As with the euro, however, analysts said the sentiment could
easily be flipped by poor news on the euro zone bond front.
"We're getting a technical rebound. A number of indicators
showed the indexes as 'oversold', and some investors have
started looking for bargains. But we're keeping a close eye on
bond yield spreads to see if this stock rebound has legs," said
Harry Sebag, head of sales trading at Saxo Banque.
(Additional reporting by Charlotte Cooper and Blaise Robinson,
editing by Mike Peacock)
