GLOBAL MARKETS-Oil slide, US glimmers of hope boost stocks
(Updates prices, adds Wall Street outlook)
By Jeremy Gaunt, European Investment Correspondent
LONDON, July 30 (Reuters) - World stocks rose robustly on Wednesday as worries about oil receded, U.S. consumer confidence stabilised and corporate earnings bolstered investor sentiment.
The dollar was barely changed against a basket of major currencies and euro zone government bond prices firmed.
European shares were up, with the FTSEurofirst 300 .FTEU3 gaining more than 1 percent. Japan's Nikkei average .N225 earlier gained around 1.6 percent. Wall Street looked set for a moderately positive open.
MSCI's main world stock index .MIWD00000PUS was up 0.7 percent and its emerging market counterpart .MSCIEF gained around 1.2 percent.
A key factor in the gains was the recent fall in oil prices and other commodities.
"The oil's descent is nice. The month-to-date ... fall in commodities is even better," Lehman Brothers said in a note to clients.
New York crude oil CLc1 was down 78 cents at around $121.40 a barrel, reflecting a major slide from its record above $147 hit two and a half weeks ago.
The fall has eased concerns about global inflation and raised prospects that central banks will be able to cut interest rates if needed to stimulate economies.
Equally, sentiment was lifted by Tuesday's U.S. economic data showing consumer confidence had halted a six-month slide, although it remained near the lowest level in more than a decade.
Spending by U.S. consumers is a key driver for much of the world's economy.
Merrill Lynch's $5.7 billion writedown and share sale was also being interpreted by some investors as a signal of a turning point in the credit crisis.
Some earnings results have also pleased, including German engineering group Siemens (SIEGn.DE) posting a stronger-than-expected rise in new orders and revenue, and U.S. consumer product maker Colgate-Palmolive (CL.N) reporting a 19 percent jump in quarterly profits.
"So far in the (European) earnings season we've had balanced positive and negative surprises, with most of the negatives from the financial sector and the positives from industrials," said Thierry Lacraz, strategist at Swiss bank Pictet.
DOLLAR STABLE, BONDS RISE
The dollar inched lower against a basket of currencies .DXY but held close to a one month high.
The euro was flat at $1.5588 EUR= recovering a touch after falling 1 percent the previous day, dented by news that French consumer confidence plunged to a record low for the seventh straight month in July.
The dollar dipped 0.2 percent to 107.85 yen JPY= but stayed in sight of a one-month high of 108.30 yen reached on Tuesday.
Euro zone government bonds were slightly higher, buoyed in general by poor euro zone economic data.
Two-year bond yields EU2YT=RR were down 3 basis points at 4.313 percent, while 10-year yields EU10YT=RR were down 2 basis points at 4.446 percent.
"There's certainly the risk of more weak euro zone data, and that certainly underpinned things yesterday," said one trader. (Editing by Victoria Main)