RTRS: Global equities rise on bailout hopes, oil rebounds
By Jeremy Gaunt, European Investment Correspondent
LONDON (Reuters) - Hopes that governments worldwide will help out ailing industries and implement stimulus measures to fight against a deepening economic crisis lifted global stocks on Wednesday while oil gained $2 a barrel.
European shares .FTEU3 were up 0.2 percent in choppy trade but Japan's Nikkei average .N225 rose 3.2 percent to a one-month closing high.
This and gains in emerging market stocks helped lift MSCI's main world stock index .MIWD00000PUS around 0.7 percent, putting it in positive territory for the month.
If sustained, it would be the first time in seven months that the world benchmark has had a monthly gain. The index has lost around 45 percent this year.
Wall Street, in the meantime, looked set for a positive open.
The White House and U.S. Congressional Democrats reached a tentative agreement on a bailout for beleaguered U.S. auto makers, helping lift the mood.
"What we are seeing right now may be a gradual turnaround in global stocks as liquidity in financial markets is seen slowly improving, helped by the latest moves by governments," said Jun Ji-won, a market analyst at Kiwoom.Com Securities in Seoul.
At the company level, global miner Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) was in focus after it announced plans to cut capital spending, slash jobs and boost asset sales but said it would hold its dividend steady.
Rio shares were up 17 percent in London. It plans to reduce its global headcount by 14,000, the latest in a series of job- cutting moves by major companies.
OIL REBOUND
Oil rebounded after having slumped 4 percent overnight on the back of lowered forecasts for U.S. energy demand and fears of a worsening global recession.
The market is looking ahead to producer cartel OPEC's December 17 meeting, which is expected to agree more output cuts to boost prices.
U.S. crude for January delivery was up around $2.30 at a little over $44 a barrel. On Tuesday, it fell $1.64, or 3.75 percent, to settle near a four-year low of $42.07 a barrel.
"The economic picture is weighing on the market, and the market is in waiting mode for next week's OPEC meeting," said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo.
On foreign exchange markets, the yen edged down against the dollar and euro as shares extended gains, while the dollar was weaker against a basket of major currencies.
The dollar rose 0.6 percent from late U.S. trading to 92.68 yen, while the euro advanced 0.9 percent to 119.97 yen.
The euro was up a quarter of a percent against the dollar at $1.2946.
Euro zone government bond prices were flat to slightly higher. The two-year Schatz yield was at 2.28 percent, barely changed, while the 10-year Bund yielded 3.21 percent, down about 2 basis points.
