* MSCI world equity index almost unchanged on day at 238.84
* European stocks gain, oil hits 6-month high
* Dollar hits 4-mth low; yen falls
By Natsuko Waki
LONDON, May 12 (Reuters) - European stocks edged higher and
oil prices hit a 2009 high on Tuesday as investors chased risky
assets further on hopes for improvement in the global economy,
pushing the low-yielding dollar to a four-month low.
Oil prices rose as high as $59.68 a barrel <CLc1>, helped by
a weaker dollar and hopes for higher demand on the back of an
economic recovery.
A smaller-than-expected fall in UK industrial output backed
up remarks from leading central bankers who said on Monday the
economy is about to turn the corner.
"The underlying environment is fully intact," said Tammo
Greetfeld, equity strategist at Unicredit Group.
"The two pillars that kept equity markets moving are still
there. One was improving leading indicators, and the other was
an earnings season that has been better than feared by the
consensus."
The MSCI world equity index <.MIWD00000PUS> was steady on
the day after hitting a six-month high on Monday. The
FTSEurofirst 300 index <> rose 0.2 percent, erasing early
losses.
"There is enough happening in both the market and the data
to support a further rally," said Bill O'Neill, portfolio
strategist at Merrill Lynch Global Wealth Management.
Its tactical asset allocation favours emerging market and
Asian stocks outside Japan, as well as small cap stocks.
The interbank cost of borrowing three-month dollar, euro and
sterling funds fell again to historic lows <LIBOR>, reflecting
improving money markets. Three-month dollar rates now stand at
0.90563 percent in London.
U.S. crude oil <CLc1> was up 1.7 percent, hitting its
highest level since November.
Emerging stocks <.MSCIEF> fell 0.1 percent.
RALLY INTACT
Consolidation in the MSCI index comes after it has risen
nearly 40 percent since March. The index is still up 4.6 percent
since the start of the year.
"We needed to pinch ourselves -- we had a massive rally in
the last two months, but the economy is more like an oil tanker,
it takes time to turn around," said David Buik, senior partner
at BGC Partners.
Leading central bankers, including European Central Bank
President Jean-Claude Trichet, said on Monday the global economy
was at an "inflection point" as growth has already picked up in
some countries. He also said monetary authorities should have
exit strategies to avoid inflation risks after embarking on
unorthodox easing policies.
U.S. stock futures were up around 0.3 percent <SPc1>,
pointing to a firmer open on Wall Street later.
The low-yielding dollar <.DXY> fell 0.6 percent against a
basket of major currencies to hit its lowest level since early
January.
Another low-yielding currency, the yen, erased earlier
losses to stand up 0.15 percent on the day at 97.29 per dollar
<JPY=>.
The June bund futures <FGBLc1> were steady on the day.
(Additional reporting by Brian Gorman and Simon Falush; Editing
by Andy Bruce)
