* Europe, Asia track Ukraine-linked U.S. gains from Friday
* Safe-haven bonds fall
* Investors cite technicals, end of Russian military
* Emerging markets rise, Turkish stocks give up gains
* Mood also lifted by Gaza truce hopes
(Adds prices, merger optimism, Turkey moves)
By Lionel Laurent
LONDON, Aug 11 Global stocks bounced after
recent sell-offs and core government debt prices fell on Monday
as markets saw a lowered risk of direct conflict between Russia
and Ukraine while Middle East tensions appeared less acute.
The MSCI World Index, which tracks stocks
from developed economies, was up 0.4 percent at 1052 GMT -
though still down 3.9 percent from July highs as the prevailing
market mood remained a cautious one.
The pan-European FTSEurofirst 300 index tracked Asia up 1
Both regions followed Wall Street's surge on Friday after
Russia said it had finished military exercises close to the
Ukrainian border, which the United States had criticised as
The Ukraine crisis has hit European markets particularly
hard with the German blue-chip DAX index down 9 percent
from its June peak, luring investors looking for attractively
priced entry points into European equities.
"Fears over the conflict between Ukraine and Russia have
receded for now, which is helping the market recover some
ground," said Arnaud Scarpaci, fund manager at Montaigne Capital
"But this is mostly a technical bounce which should last
just a few days."
Corporate merger activity also buoyed markets, with UK
infrastructure company Balfour Beatty up 2.9 percent
after rejecting a second tie-up proposal from rival Carillion
and Swiss dental-implant maker Nobel Biocare
also up on reported takeover interest.
The increased appetite for risk led to a modest drop in
safe-haven bonds, with German Bund futures slightly
down. The dollar edged up 0.1 percent against a basket of six
The cautious mood extended to the market's assessment of
events in the Middle East, with investors keeping an eye on
political infighting in Iraq and talks in Cairo between Israel
and the Palestinians on ending the month-old Gaza war.
"There has been a slight easing in (global) geopolitical
tensions but the underlying situation ... remains fragile," said
Nick Stamenkovic, bond strategist at RIA Capital Markets.
Emerging markets also got a boost, with the MSCI Emerging
Market index up 1.1 percent, as Russian stocks rose
more than 2 percent while the rouble rose against the dollar.
However, Turkey's stock market gave up early gains after
Prime Minister Tayyip Erdogan's victory in the country's first
direct presidential election on Sunday. Investors weighed the
economic risks associated with a likely further concentration of
power in the former premier's hands.
U.S. crude oil and Brent crude futures were
broadly flat, with the former ticking up at $97.65 per barrel
and the latter ticking down at $104.81.
"It's very early to start celebrating and you've still got
the negative effects of the sanctions (against Russia), which
are likely to filter through over the coming months," said
Michael Hewson chief market analyst at CMC Markets UK.
"But anything that ratchets down the tension is always going
to be an opportunity to take profit on the shorts and maybe
doing a little bit of bargain hunting."
(Reporting by Lionel Laurent; Additional reporting by Blaise
Robinson, Marius Zaharia, Andrew Winterbottom and Francesco
Canepa; Editing by John Stonestreet and Toby Chopra)