GLOBAL MARKETS-World stocks rise; euro jumps on rate doubts

                                
* MSCI world equity index up 0.7 pct at 224.39
                                
 * Euro rallies on doubts over deep rate cuts 
                                
 * Oil jumps 5 pct; government bonds fall
                                
 
                                
 By Natsuko Waki
                                
 LONDON, Dec 11 (Reuters) - Firmer Asian, British and
emerging market shares pushed world stocks to a one-month high
on Thursday with the focus on the fate of U.S. automakers, while
doubts over deep euro zone interest rate cuts boosted the euro.
                                
 Oil rose 5 percent, extending earlier gains, while the index
of leading European shares fell. U.S. stock futures were
pointing to a firmer open on Wall Street with investors focusing
on the $14 billion plan to bail out the big three U.S.
automakers.
                                
 The proposal passed the House of Representatives but its
prospects looked grim in the Senate where supporters, who say
the measure is necessary to avoid another jolt to an already
contracting economy, struggled to keep it alive.
                                
 "Most of the bad news is already in the market. It is going
to get worse? Sure. The economic news is going to get awful
worse," said Peter Dixon, UK economist at Commerzbank.
                                
 "But the market will only react if the numbers continue to
get worse."
                                
 MSCI world equity index <.MIWD00000PUS> rose 0.7 percent.
Asia <.MIAPJ0000PUS> rose 0.7 percent and Britain <.FTSE> gained
0.3 percent. Emerging stocks <.MSCIEF> rose more than 1 percent.
 The FTSEurofirst 300 index of leading European shares
<.FTEU3> was down 0.7 percent. U.S. stock futures were up around
0.1 percent on the day <SPc1>.
                                
 The euro rose 1.5 percent to a six-week high of $1.3222
<EUR=> after European Central Bank Executive Board member
Juergen Stark said the central bank does not have a lot of room
for manoeuvre after its interest rate cut last week. Stark also
said further rate reductions could be done only in small steps.
                                
 The region's interest rate futures are now showing that the
euro zone cost of borrowing to bottom out at 1.75 percent, from
just over 1.5 percent after the ECB's move last week to cut
rates to 2.5 percent.
                                
 "If the euro zone is being perceived to still have rates at
substantially higher levels then obviously there's a positive
rate spread," Rabobank markets strategist Jeremy Stretch said.
                                
 "But I'm not convinced that its ultimately going to be
positive as the dynamics of the euro zone economy are pretty
weak."
                                
 The Swiss franc cut earlier gains to trade at 1.1927 per
dollar <CHF=> after the Swiss National Bank cut interest rates
by 50 basis points. Switzerland, Canada and Korea joined a
growing number of central banks worldwide in cutting interest
rates over the past 24 hours. 
                                
 The dollar <.DXY> fell 1.3 percent against a basket of major
currencies. The December Bund futures <FGBLc1> fell 18 ticks.
                                
 U.S. crude oil <CLc1> was up 5 percent at $45.70 a barrel,
helped by favourable demand forecast by the International Energy
Agency and signs that top oil exporter Saudi Arabia has slashed
January supplies ahead of next week's OPEC meeting have
underpinned prices.
                                
 (Additional reporting by Dominic Lau; Editing by Ron Askew)