World stocks power to one-month high

World stocks hit a fresh one-month high and the dollar rose
on Monday, bolstered by firmer commodity prices and growing expectations that
banks are close to cleaning up their credit-related troubles.

Optimism also stemmed from speculation that finance chiefs
from the Group of Seven rich nations, meeting in Washington
this weekend, are considering drastic steps to fix banks and markets battered
by the U.S.
mortgage meltdown.

Australia
and New Zealand Banking Group said it expected much higher bad debt provisions
in the first half of fiscal 2008, becoming the latest bank to reveal damage
from the credit crunch.

ANZ shares fell sharply, but banking stocks in Europe climbed as efforts by financial firms to come
clean, and a possible joint plan by governments to help them, bolstered
sentiment.

“Any signal from the authorities to boost market
confidence … or try and boost liquidity I would associate with
dollar-positive and risk-taking trades,” said Paul Mackel, director of
currency strategy at HSBC in London.

The FTSEurofirst 300 index rose 0.7 % on the day while MSCI
main world equity index was up a quarter percent, hitting its highest since
late February.

European banking stocks rose almost 0.8 %, while mining
shares were up on firmer metal prices.

The dollar was up half a percent against a basket of major
currencies and around 0.6 % higher at $1.5630 per euro. The June Bund future
was down 30 ticks, pressured by firmer stocks.

European credit market sentiment also improved. The iTraxx
Crossover index, the most-widely watched indicator for European credit market
sentiment, tightened 20 basis points to 463 bps.