* World stocks up more than 1 percent to new 2009 high
* European banks, China economy rally equities
* Wall Street set for higher open
* Dollar at 2009 low vs major currencies
By Jeremy Gaunt, European Investment Correspondent
LONDON, Aug 3 (Reuters) - World stocks shot up to yet
another new 2009 high on Monday with banking news from Europe
and signs of a pick up in Chinese economic activity driving
investors to buy.
Wall Street looked set to join. The dollar tumbled to a 2009
low against a basket of major currencies.
European shares were up sharply after UBS <UBSN.VX> appeared
to have settled a tax dispute without the need to pay a fine,
bad debts at Barclays <BARC.L> failed to unsettle investors and
HSBC <HSBA.L> beat earnings expectations.
The FTSEurofirst 300 <> index of top European shares
was up 1.5 percent and has now gained more than 44 percent from
its lifetime low on March 9.
Europe's main banking index <.SX7P> was up 3.4 percent and
is now up 144 percent since March's floor.
Barclays reported an 8 percent rise in half-year profit but
bad debts almost doubled. []
UBS shares rose on reports it may not have be fined as part
a settlement with the U.S. government on wealthy Americans
suspected of using the Swiss bank to evade taxes.
HSBC said its first half profits halved from a year ago but
the results were better than analysts had calculated.
[]
Asian stocks clambered up to an 11-month high, helped by
Chinese shares.
Two surveys showed Chinese factory growth accelerating in
July thanks to a revived domestic economy and slight pick-up in
demand for its exports. The China purchasing managers index from
brokerage CLSA hit a one-year high. []
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> were up 1.3 percent, passing the levels of
early September last year and taking gains on the year to around
47 percent.
This all drove the MSCI all-country world share index
<.MIWD00000PUS> up more than 1 percent, eclipsing its previous
high for the year which was reached on Friday. This has in part
been fuelled by upbeat company results, particularly on Wall
Street.
"All in all, given the better than expected corporate
results, the markets continue to support the idea of an imminent
recovery," wealth manager BSI said in a note, adding that risk
appetite was growing as more investors fear missing the rally.
DOLLAR IN DUMPS
The dollar hit its lowest point this year against a basket
of currencies after higher oil prices, firm global stock markets
and economic data boosted investments in riskier assets. The
currency is usually hit by risk-positive news.
The euro rose to a two-month peak against the dollar and was
at $1.4288 <EUR=>.
"It's hard to find any negative news out there at the
moment, it's all about the risk appetite trade coming back in,"
CMC Markets analyst James Hughes said.
"Almost as big as the banking results today have been oil
prices, which have risen above the key $70 level and helped
commodity currencies," he added.
Euro zone government bond yields, which move inversely to
prices, jumped higher as investors switched to higher-risk
investments.
The 10-year Bund yield was at 3.326 percent <EU10YT=RR>, 4.6
basis points more than in late Friday trade while the 2-year
Schatz yielded 1.289 percent <EU2YT=RR>.
(Additional reporting by Jessica Mortimer; Editing by Ruth
Pitchford)
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