* World stocks hit fresh 30-month highs
* Oil prices rise again on Middle East tension
* Dollar slightly stronger verus euro
By Jeremy Gaunt, European Investment Correspondent
LONDON, Feb 18 (Reuters) - World shares hit fresh 30-month
highs on Friday, driven by bullish views of both economic growth
and corporate earnings, although gains were threatened by rising
oil prices linked to Middle East tension.
Brent crude rose above $103 a barrel, as unrest spreading
across the Middle East fanned fears of a supply disruption in
the major oil-producing region.
U.S. crude fell, but held above $86 a barrel, after jumping
more than $1.00 the previous day.
There appeared little, however, to disrupt a global rally in
stocks that has driven world shares up around 5 percent, with
developed market indexes such as the U.S. S&P 500 <.SPX>,
Japanese Nikkei 225 <> and European FTSEurofirst 300
<> gaining more than 6 percent.
The MSCI all-country world stock index <.MIWD00000PUS> was
up 0.1 percent having earlier hit a new 30-month high.
"There is just a greater conviction in the more promising
outlook in global economic growth," said Mike Lenhoff, chief
strategist at wealth manager Brewin Dolphin.
"We are moving from recovery phase to a sustainable
expansion."
The FTSEurofirst 300 was flat after rising for five
consecutive sessions.
An example of the growth-related drive came from France's
Lafarge which rose after it predicted stronger cement demand in
its markets this year thanks to rapid expansion in emerging
countries.
Earlier, Japan's Nikkei closed up with tiny gains.
Investors, meanwhile, were keeping an eye on a Group of 20
central bank meeting ahead of a larger two-day event which
appears set to struggle to make headway on an ambitious French
agenda. []
INFLATION
Oil prices -- and their impact on global inflation --
remained in focus as protestors in Bahrain and Libya bury people
killed in recent clashes.[]
In Libya's eastern city of Benghazi early on Friday,
thousands of anti-government protesters crowded on to the
streets, a day after "Day of Rage" demonstrations led to
skirmishes with security forces in which more than 20 people may
have been killed. []
Tension between Israel and Iran also continued over the
latter's plans to send navy ships through the Suez Canal, a move
that Israel has called a "provocation". []
Investors do not expect the rising tensions to disrupt the
global risk rally too much unless the various situations become
more violent and volatile.
"Short-term geopolitical nervousness will continue to
underpin Brent prices, but in terms of fundamentals, support
will come from the gradually recovering U.S. economy and the
ongoing momentum in China," said David Cohen, director at Action
Economics in Singapore.
Rising inflation, meanwhile, was underlined by German
producer prices for January exceeding forecasts to post their
strongest year-on-year rise since October 2008, up 5.7 percent.
On foreign exchange markets, the euro slipped due to ongoing
speculation European officials will struggle to agree on how to
solve euro zone debt problems, while the dollar recovered losses
as investors took a breather from selling before a U.S. market
holiday. The euro <EUR=> traded 0.1 percent lower on the day at
$1.3580.
Sterling meanwhile rose against both currencies on market
talk that another member of the Bank of England's Monetary
Policy Committee had moved into the hawks' camp by voting for a
rate rise in February. Minutes of the February meeting, at which
the bank left rates on hold at a record low of 0.5 percent
despite rising inflation, are due for release on Wednesday.
(Additional reporting by Harpreet Bhal; Editing by Catherine
Evans)
