* MSCI world equity index up 0.3 pct at 308.16
* Weaker dollar boosts commodity prices, related shares
* Euro higher; government bonds tick lower
By Natsuko Waki
LONDON, March 30 (Reuters) - World stocks edged closer to a
17-1/2 month peak on Tuesday as a weak dollar-inspired rally in
commodities and evidence of a recovery in U.S. consumption
spurred buying in risky assets.
The dollar fell to its lowest in almost a week against a
basket of currencies, hit in part by a rising euro after Greece
managed to raise 5 billion euros from the debt market on Monday.
Oil rose above $82 a barrel while mining shares rose broadly in
Europe as the second quarter drew to a close.
Firmer energy and mining shares as well supported Wall
Street which also took heart from data showing U.S. consumer
spending rose for a fifth straight month. This normally accounts
for about 70 percent of U.S. economic activity.
"There's been no bad news out from banks and metals prices
are strong," said Colin McLean, managing director at fund
manager SVM in Edinburgh.
"But there may be an element of window dressing to it (the
market's rise) at the end of the quarter. Some institutions may
have found themselves with more cash than they planned."
MSCI world equity index <.MIWD00000PUS> rose 0.3 percent to
its highest since early January. Just a few points more rise in
the index will bring it to levels seen soon after the collapse
of Lehman Brothers in September 2008. The index, however, has
risen only 3 percent this year.
The FTSEurofirst 300 index <> rose 0.3 percent while
emerging stocks <.MSCIEF> gained 0.5 percent. U.S. stock futures
rose around 0.2 percent <SPc1>, pointing to a firmer open on
Wall Street.
U.S. crude oil <CLc1> rose 0.2 percent to $82.31 a barrel.
German government bond futures <FGBLc1> rose 20 ticks.
Although Greece managed to sell its 7-year bonds on Monday,
demand was subdued ahead of the Easter holiday in the first test
of investor appetite since last week's EU-backed debt support
deal.
Order levels on the new bond stood at around 7 billion euros
compared with more than 16 billion euros in interest shown for a
benchmark 10-year issue, whose success in early March had eased
some of the nerves over Greece's financing.
The premium investors demand for holding 10-year Greek
benchmark bonds rather than Germany's rose to a one-week high of
336 basis points.
"Given the considerable challenges faced by Greece in
meeting its ambitious targets we believe markets will have
reason to revisit them over the coming months," SEB said in a
note to clients.
"Proposed spending cuts are politically challenging, being
extremely unpopular amongst the general public, while projected
revenue increases assume unrealistically high economic growth.
Markets are now looking forward to initial evaluation of the
country's progress starting May 15."
The dollar <.DXY> fell 0.2 percent against a basket of major
currencies while the euro rose to its strongest in nearly two
months to 125.45 yen <EURJPY=>. The single currency was steady
at $1.3480 <EUR=>.
The Australian dollar rose to US$0.9199 <AUD=>, helped by
higher commodity prices and growing talk of an interest rate
hike.
(Additional reporting by Brian Gorman; editing by Stephen
Nisbet)
