* 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 with U.S. close)
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 posted 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 over
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 almost 1.5 percent to the
highest since Aug. 9, and the momentum may carry over to
trading on Tuesday. The December futures contract that trades
in Chicago for the Nikkei 225 stock index <0#NK:> rose 45
points to 9,335.
U.S. indexes posted their 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 <> jumped 81.36
points, or 0.78 percent, to 10,544.13. The Standard & Poor's
500 Index <.SPX> climbed 12.35 points, or 1.11 percent, to
1,121.90 and the Nasdaq Composite Index <> gained 43.23
points, or 1.93 percent, to 2,285.71.
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 MSCI emerging market benchmark <.MSCIEF> rose more than 2
percent to a 4-1/2 month high.
"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. The KBW U.S. bank index <.BKX> rose 3.1 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 25.1
percent to $43.91, and HP rose .16 percent to $38.26.
[]
DOLLAR DOWN
The news on China and bank rules helped drive the euro
above $1.28 -- it fell below $1.26 in late August -- for its
best daily gain since July 15. The high-yielding Australian
dollar reached rose as high as $0.9362 <AUD=>, a five-month
peak. Australia is a top supplier of raw materials for China.
At the close of trading in New York, the euro rose 1.52
percent against the dollar to $1.2870.
"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 about 1 percent to 1.007 Swiss francs <CHF=>. The
franc is a traditional safe-haven currency.
The dollar lost 0.61 percent against the yen, to 83.65 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 67
cents, or 0.88 percent, to $77.12 per barrel, Earlier, oil has
climbed as high as $78.04 a barrel, the highest since Aug. 11.
Copper for December delivery <HGZ0> on the COMEX metals
division of the New York Mercantile Exchange shot up 7.25
cents, or 2.1 percent, to finish at $3.4790 per lb.
Gold <XAU=> fell $1.85 to $1244.10.
(Additional reporting by Leah Schnurr, Steven C. Johnson and
Richard Leong in New York, and Jessica Mortimer in London;
Editing by Dan Grebler)
