GLOBAL MARKETS-Emerging market shares at year high, oil climbs

(Updates prices with oil rising and emerging market shares at 2008 high)

By Jeremy Gaunt, European Investment Correspondent

LONDON, May 19 (Reuters) - Emerging market equities hit a new high for the year on Monday in a new bout of investor confidence, while oil prices again pushed towards $128 a barrel.

The dollar weakened slightly and euro zone government bonds were mixed. Wall Street looked set for a flat open.

MSCI's benchmark emerging market share index .MSCIEF rose to a new 2008 high of 1246.85, some 23 percent above a Jan. 22 low, but still close to 8 percent below its all-time high from last November.

"You can make a strong case that emerging markets are well-placed in any scenario going forward -- many of them are enjoying a commodities boom and many of their companies are ridiculously cheap at current valuations," said Matthias Siller, an investment strategist at Baring Asset Management.

Equities in general have been recovering from sharp losses at the beginning of the year, but the MSCI emerging index is one of the first major benchmarks to recover all losses.

Elsewhere, stocks were generally stronger. European stocks were on a four-day winning streak with the FTSEurofirst 300 .FTEU3 index of top European shares up 0.1 percent.

"The market is holding onto gains we have seen over the past week," Achim Matzke, European stock indexes analyst at Commerzbank, in Frankfurt.

Earlier, Japan's Nikkei stock average .N225 rose 0.4 percent to hit a four-month closing high.

The benchmark is now up 22 percent from the year-low hit on March 17, but is still about 6 percent below this year's highest point touched in early January.

It rose 50.13 points to end at 14,269.61, the highest close since Jan. 10. The broader Topix index added 0.6 percent or 8.38 points to 1,404.25.

OIL STRONGER

Oil, meanwhile, jumped higher after Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said he did not believe OPEC would hike supply at its September meeting. U.S. light crude for June delivery CLc1 was up $1.11 at $127.40 a barrel, just shy of the $127.82 record high hit last week.

"The market still has a bullish leaning because of a weak dollar and fuel supply concerns," said Sydney-based David Moore, a commodity analyst at the Commonwealth Bank of Australia.