GLOBAL MARKETS-World stocks hit 5-month high after Fed

* MSCI world equity index up 0.7 percent at 314.74

* Fed minutes, Intel results fan risk appetite

* Dollar, government bonds fall; oil rises

By Natsuko Waki

LONDON, Oct 13 (BestGrowthStock) – World stocks hit a five-month
high on Wednesday while emerging market equities held near a
recent 27-month peak, driven by expectations of more money
printing in the United States and upbeat corporate reports.
Minutes from the Federal Reserve’s September meeting showed
officials discussed the possibility of buying more longer-term
U.S. government debt to drive borrowing costs lower and ways to
nudge the public into expecting higher levels of inflation in
the future to spur spending [ID:nN12188145].

U.S. technology firm Intel’s (INTC.O: ) upbeat fourth-quarter
sales and margins forecast raised hopes that the technology
sector could end 2010 on a strong note.

The prospect of more cheap money and expectations that
corporate earnings would improve further encouraged investors to
buy risky assets such as equities while pushing the dollar
towards an eight-month low against the euro.

“We saw from the FOMC minutes that there is little doubt
that a further round of (quantitative easing) is likely to
happen at the next meeting,” David Morrison, market strategist
at GFT Global said.

“That is weakening the dollar and … it’s risk-on and
everything gets bought.”

The MSCI world equity index (.MIWD00000PUS: ) rose 0.7 percent
on the day to hit its highest level since April, bringing its
gains this year to more than five percent.

The Thomson Reuters global stock index (.TRXFLDGLPU: ) was
also up 0.7 percent. U.S. stock futures rose 0.7 percent (SPc1: ),
pointing to a firmer open on Wall Street later.

The FTSEurofirst 300 index (.FTEU3: ) gained one percent while
emerging stocks (.MSCIEF: ) rose more than one percent, closing in
on recent 27-month highs.

U.S. crude oil (CLc1: ) rose 1.5 percent to $82.87 a barrel
after data showed China, which surpassed the United States as
the world’s biggest energy user, set a record 35 percent
increase in September crude oil imports from a year earlier.

Actions of further policy easing in the United States and a
weaker dollar also burnished the appeal of commodities for
investors.

POLICY DIVERGENCE

German government bond prices fell after European Central
Bank Governing Council member Axel Weber said Europe’s economy
was on the road to recovery, and that the bank could raise
interest rates even with support measures in place. The bund
future (FGBLc1: ) fell 64 ticks.

Weber’s comments highlighted policy differences in the
United States and the euro zone, giving support to the euro. The
single currency rose half a percent towards $1.40 (EUR=: ), near
an eight-month high.

“In the G4 space, the ECB is the only central bank that is
talking of an exit policy and that is helping the euro,” said
Ankita Dudani, G10 currency strategist at RBS.

The dollar (.DXY: ) fell 0.4 percent against a basket of major
currencies.

The Chinese yuan (CNY=CFXS: ) inched close to its highest
level since its landmark revaluation in July 2005, as a surge in
foreign exchange reserves and exports underscored pressure for
the currency to appreciate.

China’s stockpile of currency reserves, the world’s biggest,
increased by $194 billion from July to September, the most in
any three-month period, to reach $2.65 trillion. Exports in
September rose 25.1 percent from a year earlier.
(Additional reporting by David Brett; Editing by Catherine
Evans)

GLOBAL MARKETS-World stocks hit 5-month high after Fed