* Global equities rise on rate, auto bailout hopes
* Wall Street set for weak start
* Dollar down against most currencies
* Oil up more than $2 a barrel ahead of OPEC
By Jeremy Gaunt, European Investment Correspondent
LONDON, Dec 15 (Reuters) - World stocks climbed strongly on
Monday as investors prepared for another cut in U.S. interest
rates, sought to pick up year-end bargains and reassessed the
possibility of help for the ailing U.S. auto industry.
Wall Street, however, looked set for a weak start.
The dollar fell sharply against major currencies and the
price of oil climbed ahead of this week's meeting of petroleum
exporting countries.
MSCI's main world stock index <.MIWD00000PUS> was up 1.2
percent, on track for its first positive month since May. Its
emerging market counterpart <.MSCIEF> gained more than 2
percent.
The U.S. Federal Reserve is widely expected to slash
interest rates by as much as 75 basis points to just 0.25
percent later this week in an attempt to pump money into the
deteriorating U.S. economy <FEDWATCH>.
Investors were also lifted by a late rally on Wall Street on
Friday that followed a White House statement that it would
consider using some of the Treasury's $700 billion bailout
package for financial institutions to keep the U.S. "Big 3"
automakers afloat.
Specific bailout legislation had earlier failed to get
through Congress.
The FTSEurofirst 300 index <> was up 0.4 percent, off
its highs, on Monday. Earlier, Japan's Nikkei average <>
gained 5.2 percent.
"Whilst this (auto sector bailout) will give us an immediate
boost, there are still major concerns with financials, retailers
and property stocks," said Chris Hossain, senior sales manager
at ODL Securities.
Investors were also concerned about fraud allegations
surrounding Madoff hedge funds. []
Three European banks announced a total of about $3.8 billion
in exposure to an investment fund run by Bernard Madoff, the
U.S. investor accused of running a $50 billion pyramid scheme.
RISING OIL, FALLING DOLLAR
Oil prices were fluctuating with OPEC members set to make a
deep supply cut when the oil cartel meets later this week, in an
effort to prop up prices.
U.S. light crude for January delivery <CLc1> was up more thah
$2 a barrel at $48.44.
"OPEC's bullish comments on supply cuts, such as 2 million
barrels per day, is supporting the price," said Ken Hasegawa, a
commodity derivatives sales manager at broker Newedge in Tokyo.
Oil was also getting support from a weaker dollar.
The dollar was down 1 percent against a basket of major
currencies <.DXY>, hurt by the prospects of lower interest rates
among other factors.
The euro gained 1 percent to $1.3513 <EUR=> while the dollar
lost 0.5 percent to 90.60 Japanese yen <JPY=>.
Euro zone government bond yields fell.
The interest rate-sensitive two-year Schatz yield <EU2YT=RR>
was down 8 basis points at 2.135 percent.
The 10-year Bund yield <EU10YT=RR> was down 9 basis points
at 3.200 percent. Bond yields move inversely with prices.
(Additional reporting by Atul Prakash; Editing by Ron Askew)
