* Fed stimulus hopes underpin stocks
* World stocks still set for biggest monthly fall in 15
* Dollar weakens against Swiss franc, yen
* Gold set for biggest monthly gains since November 2009
By Dominic Lau
LONDON, Aug 31 World stocks rose for the fourth
session in a row on Wednesday on hopes the U.S. Federal Reserve
will ride to the economy's rescue with another stimulus package,
though global shares were still set to post their biggest
monthly drop in 15 months.
The prospect of more Fed action weighed on the dollar while
fresh concerns that Italy is struggling to cope with its debt
burden drove the euro lower against the safe-haven Swiss franc.
Gold, bolstered throughout August by safe-haven buying,
eased 0.3 percent and was poised to post its biggest monthly
rise since November 2009.
The price of 10-year U.S. Treasuries and German
Bunds also rose sharply this month, with Treasury
yields down more than half a percentage point despite the U.S.
losing one of its AAA credit ratings.
Tuesday's slump in U.S. consumer confidence to its lowest in
two years, along with Fed minutes showing policymakers discussed
a range of unusual tools they could use to help the economy,
further bolstered expectations that the U.S. central bank is
ready to act.
The Fed's decision to hold a two-day meeting in September
instead of a one-day session has already helped stabilise
financial markets after a steep sell-off earlier in August on
concerns over slowing global growth and the euro zone debt
"Although the release of the FOMC meeting minutes offered
little in the way of consensus as to precisely what the central
bank will do next, it does still leave the door open for further
action so this may well help keep the general sentiment upbeat,"
said Cameron Peacock, market analyst at IG Markets.
U.S. stock index futures SPc1 DJc1 NDc1 rose 0.7 to
0.9 percent, indicating a firm start on Wall Street ahead of the
U.S. private sector jobs data at 1215 GMT.
The pan-European FTSEurofirst 300 index of leading
shares climbed 1.3 percent, though it was still down 12 percent
in August and set for its biggest monthly fall since October
2008, a month after the collapse of Lehman Brothers.
Global equities measured by the MSCI All-Country World Index
advanced 0.6 percent. The benchmark is down 8.2
percent this month, heading for its worst monthly percentage
drop since May last year.
In Asia, Japan's Nikkei average ended flat and was
down 8.9 percent in August, its biggest one month decline in 15
Expectations of further stimulus from the U.S. weighed on
the dollar, which was down 1.2 percent at 0.8103 francs
and 0.2 percent at 76.53 yen on Wednesday.
"In the run-up to the September FOMC, we're probably going
to have a bit more chatter about QE3 ... which is likely to keep
the dollar weak," said Andrew Robinson, FX analyst for Saxo
Capital Markets in Singapore.
The U.S. currency was down 1.3 percent in August versus the
yen, despite Tokyo's efforts to weaken its currency through
intervention. The greenback is down 5.7 percent this year
against the yen, which has held its safe-haven appeal.
The euro was down 0.1 percent at $1.4435, though the
single currency is up 7.9 percent against the dollar this year,
largely helped by Asian investors' moves to diversify their
Copper added 0.6 percent, up for the sixth day in a
row, while Brent crude LCOc1 dipped 0.3 percent to trade below
$114 a barrel.
Yields on 10-year Treasuries were steady at 2.1723 percent
after falling about 60 basis points in August. Benchmark Bund
yields have dropped 40 basis points over the same period.
(Additional reporting by Nia Williams, and graphics by Scott
Barber; Editing by Patrick Graham, John Stonestreet)