* German, Chinese PMI data less gloomy than expected
* Hopes of more Fed stimulus also buoy markets
* Euro rises against dollar
* Gold retreats after hitting fresh record high
By Dominic Lau
LONDON, Aug 23 World stocks, the euro and
commodities rose on Tuesday, after gauges of Chinese and euro
zone economic activity came in less gloomy than feared,
encouraging investors to dip back into the market after a recent
sharp selloff on global growth concerns.
Although the euro zone and Chinese PMI data showed economic
activity was likely to slow, they indicated there was still some
Hopes of more stimulus from the U.S. central bank also
buoyed markets, which shrugged off much weaker-than-expected
readings of the ZEW business sentiment index for Germany, the
single currency bloc's largest economy.
"Any data that just hints that the world is not ending is
going to be well received by the markets," Ian Richards,
European equity strategist at RBS, said.
Financial markets have stabilised in the past two sessions
after a few weeks of turmoil amid mounting fears of a new global
crash to match that of 2008.
U.S. stock index futures SPc1 DJc1 NDc1 climbed 1.2 to
1.4 percent, indicating a firm start on Wall Street.
Gold retreated more than 1 percent, after punching
another record high in Asia at $1,911.46 an ounce, as investors
dipped into riskier assets, while oil prices held steady, with
Brent crude LCOc1 above $108.50 a barrel, as government
loyalists in Libya staged a fight back.
World stocks measured by the MSCI All-Country World Index
advanced 0.9 percent on Tuesday, leaving the
benchmark down more than 12 percent this month and looking
likely to post its biggest monthly percentage drop since October
2008, just after the collapse of Lehman Brothers.
Europe's FTSEurofirst 300 index rose 1.2 percent,
extending the previous session's 0.8 percent rise, while Tokyo's
Nikkei average ended 1.2 percent higher.
Some investors were also hoping the U.S. Federal Reserve
would flag further stimulus when central bankers gather in
Jackson Hole, Wyoming, late this week, a year after Chairman Ben
Bernanke launched a second round of a government bond buying
programme, known as quantitative easing, to revive the economy.
St. Louis Fed President James Bullard told Japan's Nikkei
newspaper that the Fed could buy more bonds or make a commitment
on the size of its balance sheet if the economy weakens and
deflation reappears, but said the time was not yet right for
"Many of the gains being seen here seem to be coming off the
expectation that the Fed will serve up further stimulus
measures, possibly as soon as the end of this week," said
Cameron Peacock, market analyst at IG Markets.
"Clearly with this being priced in, failure to deliver here
will see traders heading for the exits once again."
LESS GLOOMY FOR NOW
For now, investors seemed to be prepared to chase riskier
assets again, putting worries about a possible global recession
and the euro zone sovereign debt crisis on the back burner.
The euro was up 0.8 percent at $1.4469 on Tuesday,
while the Australian dollar edged 0.9 percent higher to
The dollar was down 0.4 percent at 76.58 yen , still
holding above a record low of 75.94 yen struck late last week as
market players were wary of any yen-selling intervention by
The U.S. currency has lost 5.6 percent against the yen this
year and more than 15 percent versus the Swiss franc , as
investors sought safety.
"Japanese officials continue to express concern about yen
strength, with the volume only likely to build ahead of the
Democratic Party of Japan leadership election expected on
Monday," BNP Paribas said in a note.
"Accordingly, we continue to see intervention risk build as
the week progresses, even if from a market point of view there
seems little to argue for intervention just ahead of Jackson
Copper gained 1.7 percent to trade above $8,800 a
tonne, rebounding on relief that PMI data showed China's economy
is slowing only slightly.
Yields on 10-year benchmark German Bunds rose
4.4 basis points to 2.145 percent.
(Additional reporting by Atul Prakash and Anirban Nag in
London; Editing by Anna Willard, John Stonestreet)