GLOBAL MARKETS-Stocks, oil race to 2009 highs on recovery hopes

                                
* MSCI world equity index up 1.4 pct at 250.17
                                
 * Improving PMIs around the world boost risky assets
                                
 * Oil hits 7-mth peak above $67/bbl; dollar hits 5-mth lows
                                
 
                                
 By Natsuko Waki
                                
 LONDON, June 1 (Reuters) - World stocks and oil rose to
their highest levels in almost seven months on Monday while the
dollar hit 5-month lows after evidence of a recovery in global
factory activity fanned optimism about the world economy.
                                
 Such optimism triggered broad-based buying of riskier assets
and offset long-expected news that General Motors <GM.N> will
file for bankruptcy, which would be the third largest in the
United States.
                                
 Surveys released on Monday showed the manufacturing sector
posted modest growth in China and improvement was seen in India,
Russia and the euro zone.
                                
 "There are bits and pieces of good news from many different
areas and the risk-on theme is definitely still in place for the
moment," SEB currency strategist Johan Javeus said, adding that
risk appetite continues to be the main driver for dollar
weakness.
MSCI world equity index <.MIWD00000PUS> rose 1.4 percent to
hit its highest since November.
                                
 The index has risen 12 out of the past 13 weeks, gaining 45
percent since its March low.
                                
 The FTSEurofirst 300 index <.FTEU3> rose almost 2 percent,
while emerging stocks <.MSCIEF> gained 2.5 percent, hitting
their highest since September. The MSCI emerging equities index
rose 16.7 percent last month, its largest monthly rise in 20
years.
                                
 U.S. crude oil <CLc1> rose more than 2 percent to $67.77 a
barrel, its highest since early November.
                                
 China's official purchasing managers' index fell slightly in
May to 53.1 from 53.5 in April, its third straight month above
the 50-mark, which separates expansion from contraction. 
                                
 In the euro zone, factory activity contracted at a much less
severe pace in May than in preceding months, with the region's
PMI index posting its biggest monthly jump in the survey's
12-year history by rising to 40.7 from 36.8 in April.
                                
 The dollar <.DXY> fell 0.5 percent to hit a five-month low
against a basket of major currencies. The low-yielding yen fell
0.6 percent to 94.76 per dollar <JPY=>.
                                
 The weaker U.S. currency supported dollar-priced energy and
commodities. Gold hit a three-month high of $985.30 an ounce,
its highest since late February.
                                
 "Gold is rising because the dollar is weak, the economy is
stabilising, and interest rates are low," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong.
                                
 "There is too much hot money around as governments are
printing money, and one option is to put that into stocks and
the other is gold."
                                
 The June bund futures <FGBLc1> was steady on the day.
 (Additional reporting by Jessica Mortimer; editing by Stephen
Nisbet)