World stocks rise for 4th day, dollar tumbles

Europe's shares advanced on Friday, led higher by banks after a media report that stringent capital requirements for European banks could be relaxed, and helping power world stocks up for the fourth straight day.

The dollar fell across the broad, while 10-year US treasury yields stabilised just above 3% after falling to a six-month low overnight on the back of unexpectedly weak consumer spending numbers in US first quarter growth data. Germany's benchmark 10-year Bunds steadied above 3% after probing below the key psychological level due to concerns over a Greek debt restructuring and its impact on other heavily-indebted peripheral countries. The weaker dollar along with persistent Middle East tensions helped Brent crude to trade above USD 115 a barrel, though it was still headed for its first monthly loss since last August. Banks in the European Union could avoid part of the Basel III capital requirements under draft legislation implementing the globally agreed standards, the Financial Times said. "There is a big chance that they don't have to go out to shareholders to ask for more money and that is the main advantage because a capital increase will weigh on their stoc k prices," said Koen de Leus, strategist at KBC Securities. "It's good for banks, but it's not good for regulation. In the long-term it's not a good thing for financial stability." The FTSEurofirst 300 index of leading European shares gained 1 percent, while banks in the region rose 1.7% with Credit Agricole up 4.5% and Societe Generale rising 3.1%. Helped by firmer European shares, world equities measured by the MSCI All-Country World Index rose 0.8% , though they were still set for their biggest monthly percentage losses in a year. Emerging market shares rose 0.9%, but in Asia, Japan's Nikkei average slipped 0.4%. Dollar tumbles The dollar fell 0.6% against a basket of currencies and was down 0.9% against Swiss francs at USD 0.8575 . Jeremy Stretch, currency strategist at CIBC, said that - as long as one assumed the Greek situation was not spiralling out of control - positive signs from the Basel report for European banks and negative signs on US growth together added up to a big move lower for the dollar. "Both (euro and dollar) have fairly big negatives... they're struggling to outweigh each other on a durable basis," Stretch said. The euro was up 0.8% at USD 1.4252 and down 0.1% at 1.2223 Swiss francs . Brent crude prices rose 0.3%, though they were down more than 8% for the month. Copper prices put on 1.7%, but they were on track for their third straight monthly losses. Yields on benchmark 10-year Treasuries were up 1.5 basis points at 3.0736% after falling more than 7 basis points overnight.