Investors boost world stocks, euro as debt summit nears
By Jeremy Gaunt, European Investment Correspondent
LONDON (Reuters) - Hope that European Union leaders are close to a plan to solve the euro zone debt crisis lifted stocks on Tuesday although trade was cautious.
World stocks, including European shares, were higher and the euro gained, hitting a new six-week high. Wall Street looked set to open higher, boosting sentiment in Europe.
EU leaders are to meet on Wednesday with tentative plans in place for Greece's debt to be reduced, European banks to be recapitalized and the euro zone's EFSF rescue fund to be increased to provide partial insurance for sovereign bonds.
But the agreements and how far they go remain under discussion, causing some nerves on financial markets.
Adding to the uncertainty, German lawmakers secured a full parliamentary vote on any euro zone crisis measures negotiated, a move that risks delaying Europe's response to its two-year-old debt problems.
"Whilst official comments have stated that "good progress" is being made, behind the scenes things look a little shakier," Capital Spreads dealer Jonathan Sudaria said.
For this reason, Tuesday's trading was cautious to begin with, but prices lifted as the Wall Street opening neared. News that German consumer morale unexpectedly rose going into November also provided some succor.
MSCI's all-country world stock index .MIWD00000PUS was up a quarter of a percent at highs last seen at the beginning of September. Hopes for a euro zone settlement have boosted stocks in recent weeks. Continued...