GLOBAL MARKETS-Stocks eye Sept ’08 high, dollar weakens

* World stocks rise 0.14 pct, close to Sept 2008 high

* Dollar hits record low vs Swiss franc, yuan at record high

* Italian sells govt bonds to modest demand, yields rise

By Carolyn Cohn

LONDON, Dec 30 (BestGrowthStock) – World stocks approached their
highest level since September 2008 on Thursday on optimism about
global growth next year, while the dollar fell on expectations
of further money printing in 2011 by the U.S. Federal Reserve.

European shares bucked the rise in global equities, dipping
slightly as energy stocks fell, but U.S. stock index futures
(DJc1: )(SPc1: )(NDc1: ) pointed to a steady open on Wall Street.

Markets are focusing on growth prospects for China, and a
survey on Thursday showed the country’s vast manufacturing
sector continued to expand towards the year-end although at a
slightly slower pace than in November. [ID:nBJA002395]

Expectations for increased demand from China and other
emerging economies pushed copper to a fresh record high at
$9,550 a tonne (CMCU3: ), and U.S. crude oil (CLc1: ) hovered around
$91, not far off a two-year high.

Underlying concern about the euro zone debt crisis continued
to weigh on markets, however, as Italy sold 8.1 billion euros
($10.7 billion) of medium and long-term debt but missed the top
end of its targeted range for 8.5 billion euros and had to pay
higher yields to investors.

On the last trading day of 2010 for many Asian, European and
Latin American markets, including Japan and Germany, the MSCI
world stock index (.MIWD00000PUS: ) edged up 0.14 percent, close
to Sept 2008 highs set in the previous session.

“There may be more upside, and some more money printing.
Companies are in good shape with lots of cash …. but you can’t
just buy and hold,” said Giuseppe-Guido Amato, strategist at
Lang & Schwarz in Germany.

“There are still the systemic risks of the euro zone
sovereign debt crisis.”

The FTSEurofirst 300 index of top European shares (.FTEU3: )
dropped 0.56 percent.

World stocks have gained 10 percent this year, as investors
showed modest appetite for risk on growing signs that global
economic recovery would continue. Emerging market stocks
(.MSCIEF: ) have climbed 16 percent and European stocks (.FTEU3: )
have added 9 percent this year.

DOLLAR DOWN

The dollar suffered from expectations the Fed’s quantitative
easing programme would contribute to further currency weakness
next year. It hit a record low against the Swiss franc (CHF=: ), a
28-year low against the Australian dollar (AUD=D4: ) and a
seven-week low against the yen (JPY=: ), though ongoing concerns
about euro zone debt tempered the U.S. currency’s losses against
the euro (EUR=: ).

“The dollar is a weak currency and it will continue to
weaken against those currencies that aren’t actively trying to
disqualify themselves from being an alternative to the dollar,
which right now includes the Swiss (franc),” said Ray Farris,
currency strategist at Credit Suisse.

The Chinese yuan (CNY=CFXS: ) hit a record high against the
dollar since its revaluation in mid-June after the People’s Bank
of China set a higher mid-point for the currency cross, sparking
expectations Beijing will allow the yuan to appreciate further
in the first quarter of 2011.

A number of dealers in Shanghai said the yuan could gain
around 2 percent in the first three months of 2011 as China
needs to fight imported inflation and will face heightened
political pressure to let its currency strengthen.
[ID:nTOE6BT055]

German government bond futures (FGBLc1: ) rose 52 ticks,
helped by a strong seven-year U.S. Treasury note auction on
Wednesday and shrugging off modest demand for Italian debt at
auction on Thursday.

“This is the first (euro zone) auction that settles in the
new year and I think they will continue to be like this, with
moderate demand and big concessions,” said Luca Jellinek, head
of European rate strategy at Credit Agricole.

Copper prices continued to be driven higher by expectations
for restocking by top consumer China in the first quarter
although analysts said prices could stall near current levels
until after the holidays.

A weak dollar boosted gold (XAU=: ) to a three-week high at
$1,412.45 an ounce, putting it on course for its 10th
consecutive annual gain after a near 30 percent rally in 2010,
its strongest performance since 2007.

Silver prices (XAG=: ) shot to new 30-year peaks at $30.88 an
ounce, benefiting from strength in other industrial commodities.
Silver is now poised for an 83 percent gain this year, its best
performance in nearly three decades.
(Additional reporting by Neal Armstrong, Kirsten Donovan and
Brian Gorman; Editing by Susan Fenton)

GLOBAL MARKETS-Stocks eye Sept ’08 high, dollar weakens