* World stocks up for 4th day on growth optimism
* Euro steady as option barriers cap gains
* Italian bond auction eyed
By Dominic Lau
LONDON, June 11 (Reuters) - World equities extended their
relief rally into a fourth day on Friday on optimism over global
economic growth, while the euro steadied as it ran into
headwinds above $1.21 after three days of gains.
Commodity prices eased, also snapping three days on the up,
though crude prices held above $75 a barrel.
Investors remained optimistic about China's growth, even
though fresh data showed inflation in the world's third-largest
economy quickened to a 19-month high in May while its factory
output and capital spending moderated. []
On Thursday, Beijing announced a sharp jump in May exports,
boosting investors' confidence about its economy's strength as
Europe grapples with a sovereign debt problem.
A string of successful government bond sales from the likes
of Belgium, Portugal and Spain this week has also eased
immediate concerns about funding problems for euro zone
peripheral countries. Italy comes to the market later on Friday.
World stocks measured by the MSCI All-Country World Index
<.MIWD00000PUS> advanced 0.4 percent, helped by a 1.7-percent
rise in Tokyo's Nikkei average <>.
The World Index has gained 1.5 percent this week but is
still down 7.7 percent this year.
"Europe should have a bit of a spring this morning following
on from the Far East," said Justin Urquhart Stewart, director at
Seven Investment Management.
The pan-European FTSEurofirst 300 <> put on 0.4
percent and the Thomson Reuters Peripheral Eurozone Countries
Index <.TRXFLDPIPU> added 0.5 percent.
EURO STEADY
The euro <EUR=> steadied at $1.2110 after a three-day
rebound. Its climb petered out around $1.2150, where options
were due to expire later in the day.
That level also provided technical resistance as the
$1.2140-1.2160 region had provided support during the euro's
downward move in May.
German government bonds struggled to make any headway after
two sessions of steep falls as investors positioned for up to 7
billion euros ($8.5 billion) of Italian debt supply.
"We've seen positive risk sentiment in Asia continuing and
this has also spread into the European session so far," said
Michael Leister, strategist at WestLB.
"The market is waiting for the results of the Italian
auction. If this goes well, the relief sentiment we've seen over
the past couple of sessions now will continue."
The two-year Schatz yield <DE2YT=TWEB> climbed 1 basis point
to 0.529 percent, while the 10-year Bund yielded <DE10YT=TWEB>
2.635 percent, up 1.7 basis points.
Results for the Italian debt auction are due at 0900 GMT.
Crude <CLc1> eased 0.5 percent but held above $75 a barrel,
while copper <MCU3> dipped 0.2 percent after three-day of rises.
(Additional reporting by Ian Chua, Joanne Frearson and Naomi
Tajitsu, editing by Mike Peacock)
