* European stocks rise, Asian ex-Japan hit 3-month highs
* Oil pressured as Syria worries recede further
* Wall Street seen opening 0.6-0.7 percent higher
* China industrial output, retail sales add to optimism
* Safe-haven government bonds back-pedal
By Marc Jones
LONDON, Sept 10 World shares climbed to a near
one-month high and oil slipped with benchmark government bonds
on Tuesday after the risk of U.S.-led military action against
Syria receded and Chinese data proved stronger than expected.
Riskier assets rallied after Monday's comments from U.S.
President Barack Obama that Russia's plan to put Syrian chemical
weapons under international control could be a breakthrough in
the crisis. The rally was spurred by upbeat industrial and
retail figures from China.
Equity markets were performing particularly strongly and
Wall Street was expected to add 0.6-0.7 percent to the previous
session's 1 percent jump when trading resumes.
MSCI's world index, which tracks 45
countries, was already on course to chalk up its longest run of
daily gains since December as a 1.2 percent jump in European
shares followed a 3-month high for Asian stocks.
"What we are seeing is being driven by the tensions in Syria
being watered down a bit and a strong performance in the Asian
and U.S. markets overnight," said Lee Curtis, a sales trader at
City Index in London.
"We had clients buying into the market first thing after the
Chinese data, and they continue to hold their longs (bets on
further rises) as well so they seem pretty bullish."
Russia's proposal to work with Damascus to put its chemical
weapons under international control could avert planned U.S.
action although Obama said on Monday he will keep trying to
convince politicians to back military action.
Analysts warned it could be only a pause in the tensions but
a Russian media report that Syria had accepted the plan further
stimulated risk appetite.
Oil accelerated its fall to just above $112 a
barrel, its lowest in two weeks, while U.S. and German
government bonds and gold and
other precious metals were also back-pedalling.
Lower oil prices are supportive for global growth and
usually a particularly positive development for Asia, a region
that relies heavily on imports for its energy needs.
MSCI's broadest index of Asia-Pacific shares outside Japan
ended at its highest since early June as it
extended its gains for the week to 2.5 percent, while Tokyo's
Nikkei closed 1.5 percent higher.
Upbeat industrial output and retail sales data from China on
Tuesday added to evidence that its economic slowdown may have
Enthusiasm for hard-hit emerging markets continued to revive
after last week's weaker-than-expected U.S. jobs data which
muted expectations about how fast the Federal Reserve would
scale back its stimulus policy.
A Reuters poll on Monday showed economists generally expect
the Fed to announce a reduction in its $85 billion monthly
bond-buying programme by just $10 billion.
The MSCI emerging equities index was at a
three-month high as the day's 1.4 percent rise took its rally
over the last nine trading sessions to almost 9 percent.
Societe Generale strategist Benoit Anne warned it could
prove to be a short-term bounce.
But Bill Street, head of EMEA investments at State Street in
London, challenged that view. "When the developed markets are
getting back on their feet, I just don't understand at what
point that is bad for emerging markets," Street said.
DOLLAR, EURO CLIMB, YEN RETREATS
The cooling Syria tensions and the better China data helped
the dollar shake off some of its recent sluggishness and
the euro sidestep some weaker-than-expected French output
The broader currency market trend away from safe-havens sent
Japan's yen back below 100 to the dollar and to a
seven-week low against the euro, while the Swiss franc
also lost ground. However, the dollar remained near a
1-1/2 week low against a basket of major currencies.
Adding to uncertainty, San Francisco Federal Reserve Bank
President John Williams said on Monday he hasn't made up his
mind yet over whether to support a reduction in Fed bond
But "geopolitical risks around Syria are a bit smaller and
we also had some decent numbers out of China. This is a good
combination to go into riskier currencies, so people are moving
out of the classic safe havens like the yen and Swiss franc,"
said Arne Lohmann Rasmussen, head of FX research at Danske Bank.