* Stocks bounce on China and bank rules pact
* Wall Street on track for fourth straight winning session
* Dollar slumps and euro up 1.6 percent
(Updates U.S. trading, changes dateline to New York)
By Al Yoon
NEW YORK, Sept 13 (Reuters) - World stocks surged to a
one-month high on Monday, 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 dollar headed for its biggest daily slide against the
euro in two months as the Chinese data bolstered the appetite
for risk and drove up currencies of countries like Australia
that are big sellers to China.
The banking and economic news assuaged some concerns of
stuttering economic growth and the health of the global
financial sector.
Crude oil prices hit a one-month high and copper rallied as
the Chinese data raised hopes for demand. China is the world's
largest consumer of copper and the second largest energy
consumer.
"There's no doubt that risk appetite has returned, and the
strong Chinese data reduces the risk of a global double-dip
recession," said Matthew Strauss, senior strategist at RBC
Capital Markets in Toronto.
Asia emerging market growth has been a major fillip to the
rest of the world this year, making up for a somewhat moribund
U.S. economic performance. China on Saturday reported that
factories increased production by 13.9 percent in August, and
money growth also sped up and easily topped analysts'
expectations. []
That was part of a mixed, but generally growth-positive
message showing the Chinese economy remained buoyant despite
Beijing's efforts to clamp down on bank lending and property
speculation.
World stocks as measured by both MSCI <.MIWD00000PUS> and
Thomson Reuters <.TRXFLDGLPU> climbed more than 1.3 percent to
the highest since Aug. 10. The MSCI emerging market benchmark
<.MSCIEF> rose nearly 2 percent at a 4-1/2 month high.
U.S. indexes were headed for a fourth straight winning
session and the eighth day of gains out of nine for the S&P 500
and Dow.
The Dow Jones industrial average <> rose 48.43 points,
or 0.46 percent, to 10,511.20. The Standard & Poor's 500 Index
<.SPX> climbed 8.77 points, or 0.79 percent, to 1,118.32 and
the Nasdaq Composite Index <> jumped 31.73 points, or 1.41
percent, to 2,274.21.
Banking and materials shares were among top gainers on both
sides of the Atlantic.
The FTSEurofirst 300 <> gained 0.64 percent to
1,087.97 points, the highest close in more than four months.
"The good economic news out of China is leading to some
renewed optimism on the economic front," said Andre Bakhos,
director of market analytics at Lek Securities in New York.
"This appears to be spurring a renewed interest in equities
as investors start recognizing a recently neglected asset class
that's offering a value element."
The agreement by global regulators on new capital
requirements for banks, known as Basel III, eased fears that
lenders would have to raise capital over the next year or so.
The rules will demand banks hold top-quality capital totaling 7
percent, against the present requirement of 2 percent, but
provide for a long phase-in period. []
In Europe, shares of Credit Agricole <CAGR.PA>, Societe
Generale <SOGN.PA> and UniCredit <CRDI.MI> rose between 2.9 and
5.8 percent.
In New York, the KBW bank indeex <.BKX> rose 2.6 percent.
In addition, the European Commission almost doubled its
growth forecast for the euro zone this year. It said it
expected the economies of the 16 countries using the euro to
grow 1.7 percent this year, up from a forecast of 0.9 percent
growth in May and a 4.1 percent contraction in 2009.
Another technology sector acquisition added to the positive
tone in the United States..
Hewlett-Packard Co <HPQ.N> said it would buy cybersecurity
company ArcSight Inc <ARST.O> for $1.5 billion, the latest in a
series of technology-sector transactions. ArcSight surged 25
percent to $43.88, and HP fell 0.4 percent to $38.04.
[]
Japan's Nikkei <> closed up 0.9 percent.
DOLLAR DOWN
The news on China and bank rules helped drive the euro
above $1.28 -- it fell below $1.26 in late August -- leaving it
on track for its best daily gain since July 15. The
high-yielding Australian dollar reached a five-month peak of
$0.9362 <AUD=>. Australia is a top supplier of raw materials
for China.
The euro rose 1.6 percent against the dollar to $1.2877.
"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 fell 1 percent against a basket of major
currencies <.DXY>. The currency tends to get hit when investors
buy riskier and therefore higher-yielding assets.
But even as the euro rose on renewed risk appetite,
analysts said longer-term worries remain about U.S. growth and
the health of the euro zone banking sector. That pushed the
dollar down 1 percent to 1.0088 Swiss francs <CHF=>. The franc
is a traditional safe-haven currency.
The dollar lost 0.71 percent against the yen, to 83.56 yen.
The yen is also a traditional safe haven.
In government debt, U.S. Treasuries rose on
bargain-hunting. Treasuries had fallen seven out of past eight
sessions, as they have been deemed overvalued due to intense
buying on fears of deflation and a double-dip recession.
Benchmark 10-year Treasury note yields fell 0.05 percentage
point to 2.75 percent.
In commodities, U.S. light sweet crude oil <CLc1> rose 61
cents, or 0.8 percent, to $77.06 per barrel, Earlier, oil has
climbed as high as $78.04 a barrel, the highest price since
Aug. 11. copper rallied to $7,625 a tonne from $7,486 on
Friday.
Gold <XAU=> fell 30 cents to $1245.60.
(Additional reporting by Leah Schnurr, Steven C. Johnson and
Richard Leong in New York, and Jessica Mortimer in London;
Editing by Leslie Adler)
