* World shares hit new 11-month high for 4th straight row
* Dollar set for steepest weekly fall in four months
* Commodity prices buoyed by economic outlook
By Sebastian Tong
LONDON, Sept 11 (Reuters) - A weakening dollar and robust
Chinese economic data sharpened investor appetite for risk on
Friday, sending world stocks to fresh 11-month highs for the
fourth session in a row.
Investors shrugged off an unexpected downward revision of
Japan's second quarter GDP growth, taking their cue instead from
data showing a surprise acceleration in Chinese industrial
output, retail and production. [] []
The figures also allayed fears Beijing would rein in its
fiscal and monetary policy aggressively -- a concern that has
stalked markets in recent weeks.
The MSCI main world equity index <.MIWD00000PUS> advanced
for the seventh successive session, edging 0.4 percent higher to
its highest level since last October and on track for a 4
percent gain this week.
G20 finance ministers set the tone for the week's gains
after pledging to keep policy accommodative in order not to
endanger a nascent global economic recovery.
"Policy makers appear to be succeeding with their efforts to
stabilise the financial system and reflate the global economy
and business sentiment is continuing to improve," said Mike
Lenhoff, chief strategist at Brewin Dolphin.
"I think that for equity markets to move significantly
beyond current levels and to hold on to their gains means they
need to be discounting a sustainable recovery and I'm not sure
that they are on to this just yet."
Emerging stocks <.MSCIEF> firmed 0.6 percent to new 12-month
high while the pan-European blue-chip FTSEurofirst 300 index
<> edged 0.6 percent higher.
Almost a year after the collapse of U.S. financial giant
Lehman Brothers convulsed global markets, financial stocks were
among the strongest gainers, helping to push Britain's key FTSE
100 index <> beyond its 5,000 mark by midday.
WEAK DOLLAR
Increased appetite for higher yielding currencies and
riskier assets saw the dollar sink to a one-year low against a
basket of currencies <.DXY>.
Feeding into bearish dollar sentiment were comments by a
U.S. Treasury official that it made sense for China to diversify
its huge stockpile of reserves. []
Weighed down by persistent concern over its long term value,
the dollar is set for its steepest weekly decline in almost four
months while the euro, which hit a 2009 high of $1.4627 <EUR=>
is on track for its biggest weekly gain.
The sliding dollar also helped support commodity price gains
with gold <XAU=> rising back above $1,000 after early day
softness and oil <CLc1> holding above $71 a barrel.
The improving global economic outlook, flagged by the
30-nation Organisation for Economic Cooperation and Development,
also boosted demand for commodities. []
Emerging sovereign debt spreads <11EMJ>, an indicator of
risk appetite, tightened 3 basis points to trade at 358 bps over
U.S. Treasuries.
Euro zone government bonds remained well bid as some
investors sought refuge in less risky sovereign debt amid some
concern over the sustainability of the stock market rally.
The December Bund future <FGBLZ9> was up 32 ticks at 121.22
versus 120.90 at Thursday's settlement close.
(Additional reporting by Atul Prakash; editing by Chris Pizzey)
