* Stocks bounce on China, EU data and bank rules pact
* Wall Street set to rise
* Dollar slumps and euro uip 1 percent
By Jeremy Gaunt, European Investment Correspondent
LONDON, Sept 13 (Reuters) - World stocks surged on Monday
and Wall Street looked set to join in, driven by robust economic
news from China and relief that new global bank rules would not
mean a rush to raise billions of dollars in extra capital.
The European Commission also sharply upgraded its forecasts
for euro zone and broader European growth.
Taken together, the news assuaged some of the most trenchant
concerns among investors at the moment -- those of stuttering
economic growth and over the health of the global financial
sector.
World stocks as measured by both MSCI <.MIWD00000PUS> and
Thomson Reuters <.TRXFLDGLPU> were up 0.8 percent. The MSCI
emerging market benchmark <.MSCIEF> was up 1.5 percent at a
4-1/2 month high.
In Europe, the FTSEurofirst 300 <> gained 0.9 percent
and Japan's Nikkei <> closed up the same.
"Risks of double dip (recession) straight away are clearly
low. People have probably got over-worried in August that the
end of the world is nigh," said Michael Dicks, head of research
and investment strategy at Barclay's Wealth.
But he added: "That does not mean policymakers are not still
going to have problems."
Asia emerging market growth has been a major filip to the
rest of the world this year, making up for a somewhat moribund
U.S. economic performance. Numbers on Saturday showed China
factories increased production in August and money growth easily
topped analysts' expectations.[]
That was part of a mixed, but generally growth-positive
message showing the economy remained buoyant despite Beijing's
efforts to clamp down on bank lending and property speculation.
Global policymakers on Sunday also eased fears that lenders
would have to raise capital over the next year or so, agreeing a
long lead in to new requirements, known as Basel III, that
require banks to hold top-quality capital totalling 7 percent of
their risk-bearing assets. []
That lifted banking shares across the board and looked set
to start Wall Street off in positive territory.
The European Commission, meanwhile, almost doubled its
forecast for this year's euro zone growth, adding to a chunk of
data signs in the past month which have shown the European
upturn may be stronger and more resilient than earlier expected.
In its twice-yearly interim economic forecasts for the 16
countries using the single currency, it said it expected the
group to grow 1.7 percent this year, up from 0.9 percent
forecast in May and a 4.1 percent contraction in 2009.
DOLLAR DOWN
Despite all the nerves around the U.S. recovery, economists
are still forecasting it will grow faster than Europe, which is
set to struggle with the impact of budget cuts required to head
off worries over rising public debt across the bloc.[]
But the dollar has generally suffered as hopes for growth
globally improve, and it also suffered as the EU forecasts
improved views on the euro's prospects.
The single currency rose one percent against the dollar to
$1.2802. It also rose 0.9 percent against the low-yielding yen
<EURJPY=R> to 107.63 yen.
"Better risk appetite is putting the dollar under pressure
and the euro and currencies like the Australian dollar have been
holding up very well," said Niels Christensen, currency
strategist at Nordea in Copenhagen.
The dollar was half a percent lower against a basket of
major currencies <.DXY>. The currency tends to get hit when
investors buy riskier and therefore higher-yielding assets.
Euro zone government bond yields rose, reflecting lowere
prices, for the same reason.
(Additional reporting by Jessica Mortimer; editing by Patrick
Graham)
