* China date, prospect of Fed stimulus dominate
* Emerging markets stocks rise, Wall St set for gains
* Dollar generally weaker
By Jeremy Gaunt, European Investment Correspondent
LONDON, Nov 1 (Reuters) - Robust economic data from China
and the nearing of Federal Reserve asset-buying combined to lift
emerging market stocks and weaken the dollar on Monday, with
Wall Street looking set to open higher.
MSCI's all-country world stock index <.MIWD00000PUS> was up
a third of percent, mainly due to its emerging market component.
The emerging market benchmark <.MSCIEF> gained 1.2 percent.
The dollar index <.DXY> -- which tracks the U.S. currency
against its major counterparts -- lost nearly 0.4 percent.
On the data front, investors in risk were lifted by China's
factories ramping up their production last month, buoyed by an
influx of new business.
This highlighted the strength of the world's second-largest
economy -- driving funds into emerging markets and stocks
exposed to Chinese growth -- but also pointed to price
pressures. []
Equities were also generally lifted by the prospect of more
quantitative easing from the Fed on Wednesday. There is little
question in investors' minds that the U.S. central bank will
act, but there are worries about how much. []
The risk is that what the Fed ends up doing will not justify
the huge investment plays that have already been put in place in
the run up to the meeting.
"The China data was good. You want demand strong. It's the
demand rather than the dollar you'd be worrying about," said
Philip Isherwood, European equities strategist at Evolution
Securities. "The market is expecting QE, whether it is a large
dollop or in smaller amounts."
European stocks, however, failed to hang on to early gains.
The FTSEurofirst 300 <> was flat. Japan's Nikkei <>
lost half a percent, mainly because of yen strength against the
dollar.
QE HITS DOLLAR
The dollar came under pressure against most other major
currencies as the market geared up for the Fed's meeting. QE
essentially means printing more dollars, undermining their
value.
"The fact that the Fed will use further QE is a burden for
the dollar, whatever the volume they announce," said Ulrich
Leuchtmann, head of FX research at Commerzbank.
A recent Reuters poll found most leading economists expect
the Fed to buy between $80 billion and $100 billion in assets
per month, but totals range widely, from $250 billion to as high
as $2 trillion. []
The euro was up 0.1 percent at $1.3965 <EUR=> while the
dollar was flat against the yen <JPY=> at 80.42 yen.
Analysts said investors remained fairly short dollars as the
Fed meeting approached, with the latest CFTC data showed
short-term players lightening some positions.
(Additional reporting by Neal Armstrong and Brian Gorman;
editing by Patrick Graham)
