Wavering on fiscal policy may rock investor faith

LONDON: With world stocks already having recouped two-thirds of their 2008 losses, any wavering of policymakers' commitment to a super-loose fiscal and monetary policy framework could rock investor faith in the rally.

This week's Group of 20 summit in Pittsburgh, the Federal Reserve meeting and the minutes of the Bank of England's latest policy meeting are the risk events to watch out for, especially as the G20 pledge earlier this month to keep emergency economic support in place triggered the latest leg of the rally.

The benchmark MSCI world equity index hit a fresh 11-month high this week, bringing its gains since January to more than 27 percent, belying fears that risky assets are in imminent danger of a major correction.