* Global stocks rally as China's keeps interest rates pat
* Euro rises on renewed risk appetite, euro zone hopes
* Commodities higher on China; copper at record high
(Updates with close of European markets)
By Herbert Lash
NEW YORK, Dec 13 (Reuters) - Global stocks rose on Monday,
lifted by U.S. merger activity and China's moves to curb
inflation without raising interest rates, while commodities
advanced on China's positive economic outlook.
German bund prices fell as the prospect for stronger growth
and higher interest rates in 2011 boosted the appetite for
riskier assets at the expense of safe-haven government debt.
For details see []
Prices of long-dated U.S. Treasuries rose after buying from
the Federal Reserve, reversing earlier losses.
Investors were relieved that China refrained from boosting
interest rates after central bank inflation data over the
weekend showed signs that price pressures are broadening beyond
food. []
China's central bank raised reserve requirements for banks
instead of benchmark interest rates, easing concerns that a
tightening of its monetary policy could lead to a slowdown in
one of the major growth engines of the global economy.
[]
Copper, which is used in power and construction, hit a
record high.
China's "foot is still firmly on the gas pedal, and that
has lifted the risk trade in general," said Burt White,
managing director and chief investment officer at LPL Financial
in Boston.
The Shanghai Composite Index <>, China's benchmark
gauge for stocks, closed up 2.9 percent, its largest percentage
gain in two months. []
European shares rose for a sixth straight day, the longest
winning streak in five months, on optimism over the economy and
China's rate move. []
The pan-European FTSEurofirst 300 index <> rose 0.3
percent to end at 1,129.33 points, while MSCI's all-country
world stock index <.MIWD00000PUS> rose 0.9 percent.
"There's been a general drift-up of expectations in terms
of economic forecasts, especially for Germany," said Bill
Dinning, head of strategy at Aegon Asset Management in
Edinburgh.
Merger activity helped lifted U.S. equities with major
acquisitions announced by General Electric Co <GE.N> and Dell
Inc <DELL.O>.
The Dow Jones industrial average <> was up 41.63 points,
or 0.36 percent, at 11,451.95. The Standard & Poor's 500 Index
<.SPX> was up 4.58 points, or 0.37 percent, at 1,244.98. The
Nasdaq Composite Index <> was up 1.00 points, or 0.04
percent, at 2,638.54.
Gold extended gains above $1,390 an ounce and the dollar
surrendered early gains against the euro.
The dollar fell broadly, hurt partly by concern that a U.S.
deal on tax cuts could swell an already large budget deficit at
a time when the Federal Reserve is committed to accommodative
monetary policy. []
The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> off 0.94 percent at 79.318.
The euro <EUR=> was up 1.20 percent at $1.3392, while
against the Japanese yen, the dollar <JPY=> was down 0.48
percent at 83.72.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
10/32 to yield 3.29 percent.
U.S. light sweet crude oil <CLc1> rose 31 cents to $88.10 a
barrel.
The Organization of the Petroleum Exporting Countries
agreed on Saturday to maintain its production policy and
leading member Saudi Arabia said it still favored oil prices
between $70 and $80 per barrel. []
Asian stocks posted modest gains, helped by a nearly 3
percent rise in Chinese shares on Beijing's latest policy
moves. MSCI's Asia index, excluding Japan, <.MIAPJ0000PUS> rose
0.6 percent, and Japan's Nikkei average <> closed 0.8
percent higher.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge
Fund Blog click on http://blogs.reuters.com/hedgehub)
(Reporting by Steven C. Johnson, Ellen Freilich in New York;
Kirsten Donovan and Harpreet Bhal in London; writing Herbert
Lash; Editing by Kenneth Barry)
