* Global stocks gain on better economic recovery sentiment
* Oil rises nearly $2 after fresh Nigerian attacks
* Dollar edges up on China's foreign reserve comments
* U.S., euro zone bonds rise in continued auction relief
(Updates with U.S. markets activity; changes dateline,
previous LONDON)
By Herbert Lash
NEW YORK, June 29 (Reuters) - Global stocks rallied on
Monday, lifted by better-than-expected sentiment in Europe in
June and renewed hopes of recovery, while the U.S. dollar rose
after China ruled out any sudden change in its foreign reserve
policy.
Oil prices topped $71 a barrel, supported by rising equity
markets around the world and after fresh rebel attacks on oil
installations in Nigeria.
Government debt on both sides of the Atlantic rose on
continued relief over the strong demand for the heavy doses of
recent new debt. Benchmark yields on U.S. Treasuries slipped to
their lowest level in a month.
Copper hit a two-week high as confidence grew that the
global economy was healing, while gold slid toward $935 as the
dollar gained on comments by Chinese officials at a meeting of
central bankers in Basel, Switzerland over the weekend.
China's policy governing its $1.95 trillion in foreign
reserves -- the bulk of which are U.S. Treasuries -- was stable
and consistent with no "sudden changes," the country's central
bank governor Zhou Xiaochuan said, giving the dollar some
respite. For details, see []
"Today's tacit reaffirmation of the dollar standard is a
sign of Chinese acknowledgment that for the time being the
greenback remains the primary manner for settling global trade
accounts," said Boris Schlossberg, director of currency
research at GFT Forex in New York.
The dollar had come under pressure recently as debate
intensified about the use of an alternative global currency to
the greenback, with China's central bank renewing its call for
a super-sovereign reserve currency last week.
The rise in crude oil also bolstered energy shares on both
sides of the Atlantic, with Exxon Mobil Corp <XOM.N> gaining
1.9 percent, Royal Dutch Shell <RDSa.L> up 1.8 percent and
Total <TOTF.PA> adding 2.5 percent.
Economic news also provided a boost to global equity
markets, as euro zone economic sentiment improved more than
expected in June, data showed, [] while Japanese
industry output rose for the third month in a row.
A surge in Shanghai stocks <> to a one-year closing
high for the fourth straight session on signs of Chinese
economic recovery also bolstered investor sentiment.
"On a very short-term basis, the American investor is
taking comfort from international markets, which have had
decent activity," said Joseph Battipaglia, market strategist at
Stifel Nicolaus in Yardley, Pennsylvania.
At 1 p.m., the Dow Jones industrial average <> was up
76.86 points, or 0.91 percent, at 8,515.25. The Standard &
Poor's 500 Index <.SPX> was up 6.90 points, or 0.75 percent, at
925.80. The Nasdaq Composite Index <> was up 10.21 points,
or 0.56 percent, at 1,848.43.
In Europe, the pan-European FTSEurofirst 300 <> index
of top shares closed up 1.8 percent at 859.63 points. The index
fell nearly 2 percent last week.
Bonds rallied through much of last week. Yields fell after
three U.S. debt auctions totaling a record $104 billion of
notes saw above-average demand. Traders were relieved that the
global appetite for U.S. government debt did not wane in the
face of a deluge of supply.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
10/32 in price to yield 3.49 percent. The 2-year U.S. Treasury
note <US2YT=RR> was break-even in price to yield 1.10 percent.
The dollar rose against a basket of major currencies, with
the U.S. Dollar Index <.DXY> up 0.04 percent at 79.906.
The euro <EUR=> rose 0.17 percent to $1.4075, while against
the yen, the dollar <JPY=> was up 0.72 percent at 95.91.
U.S. light sweet crude oil <CLc1> rose $1.81 to $70.97 a
barrel.
Spot gold prices <XAU=> rose $1.00 to $939.55 an ounce.
Worries over a slowdown in Chinese imports of copper put a
lid on gains. Copper for three-months delivery <MCU3> on the
London Metal Exchange traded at $5,160 from $5,035 on Friday.
Asian stock markets retreated as weaker oil prices hit
energy shares. The MSCI index of Asia-Pacific shares outside
Japan <.MIAPJ0000PUS> slipped 0.7 percent in light trade, while
Japan's Nikkei average <> shed 1 percent.
(Reporting by Edward McAllister, Vivianne Rodrigues, Chris
Reese in New York; Emelia Sithole-Matarise, Jon Hopkins,
Rebekah Curtis and Maytaal Angel in London; writing by Herbert
Lash, Editing by Chizu Nomiyama)
