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* World shares up 0.4%, U.S. futures up sharply
* Vaccine hopes drives optimism after EZ factory recovery
falters
* China factory activity growth hits decade high in November
* U.S. dollar weakens, Bitcoin off record highs
* Oil volatile after OPEC+ talks delay, copper up
By Danilo Masoni
MILAN, Dec 1 (Reuters) - World shares rose to just below
record peaks on Tuesday after factory surveys boosted
expectations of a recovery from the COVID-19 downturn, with
drugmakers seeking fast approval for vaccines and authorities
looking set to maintain stimulus.
Bets on more easing from the U.S. Federal Reserve to help
the pandemic-hit economy through the winter weighed on the
dollar as riskier currencies rose, while crude prices struggled
to join the bounce after oil-producing countries delayed a
decision on output cuts.
The MSCI world equity index, which tracks
shares in 49 countries, was up 0.4% by 1323 GMT.
Breakthroughs in vaccine developments from top drugmakers
Pfizer, Moderna and AstraZeneca in
November along with a market-friendly outcome of the U.S.
presidential election helped the index score its best month on
record, up 12% to new all-time peaks.
"We believe the rally can continue, with the current
pipeline of expected vaccine rollouts in line with our central
scenario of widespread availability in the second quarter of
2021," said Mark Haefele, Chief Investment Officer at UBS Global
Wealth Management in Zurich.
"We also believe that a divided U.S. government - which
looks the most likely outcome - is no impediment to a rising
market," he added.
In Europe the pan-regional STOXX 600 benchmark was
up 0.7%, while U.S. stock index futures also pointed to a strong
start on Wall Street, with investors focusing on November
manufacturing surveys from Europe and the United States.
Euro zone factory surveys were less upbeat than China's as
growth in the region cooled last month from a 32-month high on
renewed lockdown measures. However, optimism did improve amid
progress in developing COVID-19 vaccines.
In the UK, factories recorded their fastest growth in almost
three years last month.
Earlier the MSCI's broadest index of Asia-Pacific shares
outside Japan closed up 1.3%. China's blue-chip
CSI300 index rose 2.2% after a business survey showed
activity in China's factory sector accelerated at the fastest
pace in a decade in November.
Japan's Nikkei closed near a 29-1/2-year high.
"What we are seeing today is that upward trend reasserting
itself, given the positive news on the vaccine front, China's
growth picking up, and the tremendous faith in the ability of
central banks to keep the markets afloat," said Stephen Miller,
market strategist for GSFM Funds Management.
Pfizer on Tuesday said it had asked for EU emergency
authorization of its vaccine, taking it closer to launch
following a similar move in the United States last month.
Moderna applied for U.S. authorization on Monday
after full results from a late-stage study showed it was 94.1%
effective with no serious safety concerns.
In foreign exchange markets, the dollar was under pressure
after closing out on Monday its worst month since July with a
little bounce, and as investors reckon on even more U.S.
monetary easing.
The dollar index was last down 0.2% to 91.758.
In a speech released late on Monday, Fed chair Jerome Powell
said a slowing recovery and a surging pandemic meant the U.S.
was entering a "challenging" few months, with the potential
deployment of a vaccine still facing hurdles.
The Fed holds its next policy meeting later this month.
That lifted the euro close to a three-month high,
up 0.4% at $1.1974, while risk-related currencies such as the
Canadian and Aussie dollar rose against the greenback.
Elsewhere sterling was up 0.5% after hitting a
three-month high as traders clung to hopes for a Brexit trade
deal before the year's end, despite the lack of tangible
progress.
Bitcoin was volatile, last down 6% after hitting
a record high earlier in the day.
Bond markets were quieter. Germany's 10-year bond yield
nudged off three-week lows at -0.564%, while
southern European debt yields also edged up, though they held
close to record lows ahead of next week's European Central Bank
meeting.
Data on Tuesday showing a bigger than expected drop in euro
zone inflation in November didn't move bond markets much but
cemented expectations for the ECB to take action.
"The message is clear for the ECB. As this has been the base
case for some time now, it will without a doubt make the ECB
loosen policy once again," said ING senior economist Bert Colijn
in Amsterdam.
U.S. 10-year yields were up slightly at 0.8602%
as the U.S. Congress began a two-week sprint to secure funding
and avoid a possible shutdown amid the coronavirus pandemic.
Metal markets were buoyant, reflecting the risk-on mood.
London copper prices pushed back towards Monday's 7-1/2-year
high, helped by the robust data from China.
Oil prices were volatile after leading producers delayed
talks on 2021 output policy, while the coronavirus pandemic
continued to sap fuel demand.
OPEC+ delayed talks on output policy for next year until
Thursday, sources told Reuters, as key players still disagreed
on how much oil they should pump amid weak demand.
Brent crude futures were last 0.2% lower at $47.8 a
barrel, while U.S. crude also eased 0.4% to $45.16.
(Reporting by Danilo Masoni in Milan, additional reporting by
Paulina Duran in Sydney; Editing by Mike Collett-White and Jan
Harvey)
