By Tamawa Desai
LONDON, Nov 9 (Reuters) - Global stocks rose and the dollar
tumbled on Monday after the Group of 20 pledged to keep economic
stimulus in place until recovery was assured, following Friday's
news that U.S. unemployment has risen to a 26-year high.
U.S. stock futures <SPc1> were up around one percent,
pointing to a higher open on Wall Street. European equities
<> rose for a fourth straight session to hit a two-week
high, led higher by banking and commodity shares.
That came after Tokyo's Nikkei share average closed up 0.2
percent <> and other Asian shares also gained.
"It's pretty clear that the stimuli that the governments
have put in the market are going to be kept and that's a
positive sign for the market," said Koen De Leus, economist at
KBC Securities.
"That, for the moment, is the thing that keeps markets up,
keeps the economy up and adds liquidity into the system. As long
as these things are kept up, the markets can rally," he added.
The MSCI world equity index <.MIWD00000PUS> rose 1.0 percent
by late morning London trade.
The dollar fell broadly as higher-yielding and
commodity-linked currencies benefitted from renewed risk-taking.
"We have positive equity markets so we have risk appetite.
And that is still a dollar negative. People are buying into
higher yielding currencies or currencies where rates are going
higher," said Niels Christiensen at Nordea in Copenhagen.
"It's difficult to pinpoint any reason to hold or buy the
dollar. So the dollar is still the preferred funding currency,"
he said.
Backed by positive sentiment, the euro extended gains to hit
a session high of $1.5011 <EUR=> after German industry output
rose a higher-than-expected 2.7 percent in September from the
previous month, data showed.
The Australian <AUD=> dollar was up 1.0 percent against the
U.S. dollar while the New Zealand <NZD=> dollar gained 1.6
percent.
The G20 finance ministers and central bank governors,
meeting over the weekend in Scotland, refrained from directly
addressing currencies in talks on rebalancing the global
economy.
The International Monetary Fund also said in a report while
the dollar had depreciated in recent months, it still remained
on the "strong" side, putting pressure on the U.S. unit.
The U.S. dollar's fall prompted gold prices to hit a record
high, rising above $1,100 an ounce <XAU=> and extending last
week's near 5.0 percent gains.
Oil <CLc1> rose more than $1 to above $78 a barrel,
recouping some of the previous session's near 3.0 percent loss,
on fears a powerful hurricane would cut U.S. oil and gas
supplies and also lifted by the falling dollar.
Bond markets were pressured not only by higher stocks but
also ahead of a slew of supply this week, notably the $81
billion from the United States which starts with a sale of $40
billion in three-year notes later in the day.
Yields on 10-year Treasury notes edged up to 3.527 percent
<US10YT=RR>, 2.5 basis points more than in late U.S. trade on
Friday.
Japanese benchmark 10-year government bond yields surged to
a 4-1/2 month high as investors demanded higher premiums ahead
of JGB auctions.
Data on Friday showed U.S. employers cut a
larger-than-expected 190,000 jobs in October and the
unemployment rate rose to 10.2 percent.
(Additional reporting by Atul Prakash and Jamie McGeever;
Editing by Toby Chopra/Ruth Pitchford)
