GLOBAL MARKETS-Japan market recovery helps shares bounce back

                                
 * World stocks <.MIWD00000PUS> rise
                                
 * Japan bounces back 4 pct as markets return
                                
 * Expected ECB rate hike propels euro higher
                                
 * Eyes on Libya, Japan
                                
 
                                
 (Adds comment, updates prices)
                                
 By Pratima Desai
                                
 LONDON, March 22 (Reuters) - World stocks put in solid gains
on Tuesday as concerns eased about the impact of Japan's triple
disaster on world growth prospects and traders in Tokyo returned
from a national holiday to recoup some of last week's losses.
                                
 Buyers expecting the economy will also ride out continuing
unrest in the Middle East emerged to tap cheap valuations, while
the euro rose to its highest in four and a half months against
the dollar.
                                
 The conflict in Libya, while unrest bubbles in other Arab
states, kept oil prices high and boosted gold, used as a hedge
against rising security concerns. [ID:nTOPMEAST]
                                
 But after a strong sell-off following Japan's earthquake and
tsunami, investors have begun to return to equity markets.
Reports of progress in containing radiation leaks at the
Fukushima plant helped Tokyo shares rally more than 4 percent
<.N225>.
                                
 "The global multispeed recovery remains on a steady path,
with most economies set to experience at- or near-potential
growth in 2011," Roubini Global Economics macroeconomic team
said in a note.
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index of top
shares was 0.2 percent higher at 1,110.23 points at 1141 GMT
after surging 1.8 percent in the previous session, buoyed by
merger and acquisition news in the telecom sector. [.EU]
                                
 "If there is no escalation of violence in Libya and no
sudden twist in the Japan nuclear reactor situation, it looks
like we will recoup the losses since the Japan crisis," Angus
Campbell, head of sales at Capital Spreads said. 
                                
 The MSCI global stocks index <.MIWD00000PUS> was up 0.6 pct.
                                
 U.S. stocks were set to open little changed. [.N]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
  Dollar index weekly trendline: http://r.reuters.com/jum68r  
  Japan current account:      http://link.reuters.com/hac68r 
  Graphic on intervention:    http://link.reuters.com/sub68r 
  Earthquake in graphics         http://r.reuters.com/fyh58r   
  Yen stop-loss selling       http://link.reuters.com/fac68r 
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>  
                                
 
                                
 GOLD AT NEW RECORD
                                
 In currency markets the euro <EUR=> hit $1.4249, its highest
since November, boosted by expectations the European Central
Bank will raise interest rates next month, which prompted demand
from longer-term "real money" investors.
                                
 "Euro/dollar is supported after (ECB President Jean-Claude)
Trichet continued to signal a rate hike in April," said Mic
Ingenuus, currency strategist at Nordea in Copenhagen.
                                
 The latest batch of comments from policymakers on Monday
showed them sticking to a hard line on inflation as well as
language which has traditionally been used to signal a rise in
rates was imminent. [ID:nLDE72K0ZO]
                                
 The yen <JPY=> steadied as concerns about possible further
intervention by the Group of Seven major economies to undermine
it against the dollar and other currencies stopped traders from
trying to push the Japanese currency higher. [FRX/]
                                
 "We see the G7's decision to intervene as a game-changer for
(dollar/yen). Joint intervention may have a delayed impact, but
it tends to be associated with a change in direction," Standard
Chartered said in a note.
                                
 Worries about the disruption of crude supply are expected to
underpin oil prices, even though some investors were taking
profits in anticipation of a slowdown in air strikes against
Libya. [ID:nLDE72L00C]
                                
 Brent crude for May <LCOc1> earlier touched a $115.50
earlier -- less than $5 from a 2-1/2-year high near $120 hit
last month. It was last at $114.73.  [O/R]
                                
 "It now seems likely that there will be a significant loss
of Libyan oil supplies for some time," said Ric Spooner, chief
market analyst at CMC Markets. "This will reduce the buffer of
excess capacity and increase the oil market's vulnerability to
any new supply shocks which may emerge."
                                
  JPMorgan in a note said: "A resolution to the Japanese
nuclear crisis would be bullish for crude prices near term as it
would shift the focus to Japan's reconstruction."
                                
 (Additional reporting by Jeremy Gaunt, Jessica Mortimer,
Rujun Shen, Joanne Frearson  and Alejandro Barbajosa; editing by
Patrick Graham)