(Updates with Deutsche Bank, euro zone economic details)
* MSCI world equity index up 0.7 pct at 317.16
* Gold prices recover more than 2 pct
* Dollar rally stalls as oil peeks above $102
By Sebastian Tong
LONDON, Sept 12 (Reuters) - World stocks rose nearly 1
percent on Friday, buoyed by hopes of a rescue for troubled Wall
Street giant Lehman Brothers <LEH.N> while oil climbed above
$102 a barrel as Hurricane Ike headed for the Texas Gulf Coast.
Metals prices also rose, led by spot gold, while a rally in
the dollar stalled.
Wall Street is to open weaker as uncertainty mounted over
who would take over Lehman amid reports saying that Bank of
America Corp. was a frontrunner. []
Early optimism over a possible rescue of the 158-year-old
firm lifted the MSCI main world equity index <.MIWD00000PUS> 0.7
percent higher to 317.28 and the FTSEurofirst 300 <> index
of top European shares was up 0.6 percent.
"There is a lot of optimism in the market... It's quite
positive that somebody is willing to take it on and that gives
hope to the rest of the sector," said Sejal Patel, dealer at CMC
markets.
Deutsche Bank <DBKGn.DE>'s up to $13 billion deal to take
control of rival Deutsche Postbank <DPBGn.DE> also spurred
expectations of a regional banking sector consolidation.
Banking shares in Europe were among the day's strongest
gainers, with BNP Paribas <BNPP.PA> gaining 1.4 percent and
Credit Agricole <CAGR.PA> up 2 percent.
U.S. stock futures <SPc2> were down 0.5 percent.
Lehman, which posted a $3.93 billion third quarter loss on
Wednesday, has seen its shares lose more than three-quarters of
their value since the start of the week, raising fears over the
viability of the investment bank.
Financial markets hit a volatile patch this week following
the U.S. government's seizing control of mortgage giants Fannie
Mae and Freddie Mac, with Monday's rally giving way to jitters
over the stability of the financial sector.
OIL, METALS
Higher metals prices also provided some support with spot
gold <XAU=> rising over 2 percent earlier in the day on
bargain-hunting.
Comments by Eurogroup Chairman Jean-Claude Juncker saying
that Europe was not on the brink of a recession also helped to
bolster sentiment. []
Safe-haven Euro zone government bond futures <FGBLc1>
dropped by 20 ticks.
Emerging shares <.MSCIEF> were 1 percent higher while
emerging sovereign debt spreads <11EMJ>, an indicator of risk
aversion, were 2 basis points wider.
The dollar, which hit a one-year high of 80.375 against a
basket of six currencies on Thursday <.DXY>, was 0.3 percent
softer.
However, both the dollar and yen remain firmly on track for
solid gains this week, fuelled by a general cutting of risk,
unwinding of long-held leveraged positions and falling commodity
prices.
"Risk aversion remains elevated and the dollar should
continue to benefit as a safe haven currency," UBS said in a
note to clients.
The euro <EUR=>, which tumbled to a year-low versus the
dollar on Thursday, was up 0.4 percent at $1.4076 while the yen
<JPY=> was 0.1 percent weaker at 107.12 per dollar.
Oil <CLc1> rose above $102 a barrel with markets training a
watchful eye on the path of Hurricane Ike which threatens to
disrupt refineries and production in the Gulf of Texas for weeks.
(Additional reporting by Joanne Frearson)
