* World stocks rise, boosted by U.S. tax deal
* Euro gains on Ireland budget hopes
By Dominic Lau
LONDON, Dec 7 (Reuters) - Global equities advanced on
Tuesday after a compromise deal to extend expiring U.S. tax
cuts, though the euro zone's debt crisis and speculation over a
possible interest rate rise in China kept them in check.
The euro rose on optimism that Irish lawmakers will pass its
toughest ever budget later in the day. The single currency
remained vulnerable, however, with European policymakers
dithering over how to tackle the region's debt problem.
Copper prices gained, supported by Chinese buying and a
firmer euro, while uncertainties over monetary policy in China
-- the world's second largest oil consumer -- weighed on crude
prices.
U.S. President Barack Obama unveiled a deal late on Monday
to renew tax cuts not just for the middle class but for also
wealthier Americans, as Republicans wanted. []
The announcement was welcomed by the markets, with U.S.
stock index futures <SPc1> <DJc1> <NDc1> trading 0.2 to 0.3
percent higher and global stocks measured by MSCI All-Country
World Index <.MIWD00000PUS> adding 0.3 percent.
"The market is benefiting from the compromise in the U.S. on
the extension of the Bush tax cuts and to a lesser extent from
the probable voting (through) of the Irish (budget)," said
Philippe Gijsels, head of research at BNP Paribas Fortis Global
Markets.
Europe's FTSEurofirst 300 <> index put on 0.2 percent
and shares in euro zone peripheral economies also rose, while
borrowing costs in those countries held steady.
The Irish benchmark <.ISEQ> gained 1 percent, as Prime
Minister Brian Cowen is expected to get his fiscal plan through
parliament and avert the risk of a snap election.
[]. Last month, the country accepted an 85 billion
euro international bailout package.
The euro <EUR=> was up 0.4 percent at $1.3356.
"The euro is gaining support on optimism that the Irish
budget will be passed but I expect any rallies to be fleeting.
Structural weaknesses in the euro zone remain in place," said
Lee Hardman, currency analyst at BTM-UFJ.
EURO ZONE ON WATCH
The single currency region's policymakers have yet to show
the financial markets that they can decisively resolve its debt
problem.
After a five-hour meeting, the bloc's finance ministers said
late on Monday they would be taking no new steps to tackle the
contagion, saying an existing emergency fund was sufficiently
big and that a proposal to issue euro zone bonds had not even
been broached. []
German Chancellor Angela Merkel, speaking in Berlin,
rebuffed calls for a bigger financial safety net or joint euro
bonds.
Yields on sovereign bonds issued by peripheral euro zone
countries were largely steady. Ireland's 10-year bond yields
<IE10YT=TWEB> over benchmark German Bunds <DE10YT=TWEB> eased 3
basis points to 563 bps, while those on Portuguese 10-year bonds
<PT10YT=TWEB> rose 2 bps to 324 bps.
The dollar was steady at 82.66 yen <JPY=> after slipping to
a three-week low against the Japanese currency earlier in the
session. The renewed strength in the yen dragged Japan's Nikkei
225 <> down 0.3 percent.
In the commodity market, copper <CMCU3> rose 1.9 percent,
while oil prices <CLc1> dipped 0.1 percent.
"The euro has jumped a lot in the past few hours, and that
has really lifted copper," a trader in Sydney said.
"Also demand in China is very strong. We think they may be a
little short and are moving to cover exposure. The two together
could see us make a new high a little above the old levels
before coming off again."
(Additional reporting by Atul Prakash, Neal Armstrong and
William James in London, and Nick Trevethan in Singapore;
Editing by John Stonestreet)
