Sept. 17 (Bloomberg) -- The MSCI World stock index climbed to an 11-month high and emerging-market bonds rallied on growing signs of a global economic recovery and improvement in the financial system.

The MSCI World Index of 23 developed nations rose 0.4 percent at 12:45 p.m. in London to the best level since October. Russian bonds extended their longest winning streak since August 2007 as the benchmark dollar notes due 2030 gained for an 11th consecutive day.

Nippon Steel Corp. climbed after saying it will open an idled furnace as the global economy rebounds from its first recession since World War II. Irish banks jumped as the country detailed plans to purge lenders of toxic assets. Job openings in London financial services climbed the most this year in August, signaling the industry is recovering from the collapse of Lehman Brothers Holdings Inc. one year ago.

“Risk appetite is coming back with a bang,” said Tom Fallon, head of emerging markets at La Francaise des Placements in Paris, which manages the equivalent of $11.8 billion. “We’ve had upside surprises on data in emerging markets and in G-7.”

The Dow Jones Stoxx 600 Index of European shares climbed for the 10th time in 11 days, adding 0.5 percent. A 56 percent increase since March 9 has driven valuations on the gauge to 46.8 times profit, the highest level since 2003, weekly Bloomberg data show.

Irish Banks

Bank of Ireland Plc rose 10 percent and Allied Irish Banks Plc jumped 22 percent in Dublin as the government announced a proposal to spend 54 billion euros ($80 billion) buying real- estate loans.

British Airways Plc advanced 4.7 percent in London after Goldman Sachs Group Inc. added the shares to its “conviction buy” list, citing a recovery in sales, cost-cutting and synergies from a potential merger with Spain’s Iberia Lineas Aereas de Espana SA. Iberia gained 3.3 percent in Madrid.

EasyJet Plc rose 5.3 percent in London after Morgan Stanley upgraded Europe’s second-biggest discount carrier to “overweight” from “equal weight.”

Futures on the Standard & Poor’s 500 Index added less than 0.1 percent before a report that may show U.S. builders broke ground on the most houses in nine months in August, another sign of stability in the industry that precipitated the worst financial crisis since the Great Depression, economists said. Separate data from the Federal Reserve Bank of Philadelphia may indicate manufacturing in the region increased this month.

Oracle, IPOs

The rise in futures indicated that the S&P 500 may advance for a fourth consecutive day. Gains were limited as Oracle Corp. slid 2.6 percent in pre-market New York trading after the world’s second-largest software maker reported first-quarter sales that trailed analysts’ estimates.

Initial public offerings in Hong Kong by Metallurgical Corp. of China Ltd. and Sinopharm Group Co. have raised a combined $3.5 billion, people with knowledge of the sales said.

Metallurgical Corp., a state-owned construction and engineering company, and an investor sold HK$18.2 billion ($2.3 billion) of stock, two of the people said. Sinopharm Group Co., China’s biggest drug distributor, raised HK$8.73 billion, according to two other people.

The Shanghai Composite Index climbed 2 percent to a one- month high, led by commodity producers. PetroChina Co., the nation’s biggest oil company, rose 1.9 percent as crude traded above $72 a barrel in New York. The MSCI Emerging Markets Index gained 0.8 percent to the highest in a year.

Global Confidence

Russian bond yields fell 11 basis points to 2.74 percentage points over U.S. Treasuries, the lowest in a year, according to JPMorgan Chase & Co.’s EMBI+ Index.

Confidence in the world economy held at a record high in September, the Bloomberg Professional Global Confidence Index showed yesterday. Measures of sentiment in France and Germany improved after their economies unexpectedly returned to growth last quarter.

The MSCI World Index has climbed 66 percent since March 9 as the Group of 20 nations committed about $12 trillion to revive growth and the Fed kept its target rate for overnight lending between banks at near zero to unlock credit markets after the bankruptcy of New York-based Lehman.

To contact the reporters on this story: Daniel Hauck in London at dhauck1@bloomberg.net.

Last Updated: September 17, 2009 07:50 EDT