* Optimism about economy lifts riskier assets
* World stocks up 0.4 percent, Europe ahead 1.3 pct
* Wall Street set for gains
* Euro rises
* Oil buoyant above $91 a barrel
By Jeremy Gaunt, European Investment Correspondent
LONDON, Jan 4 (Reuters) - Optimism about the state of the
world economy lifted stocks on Tuesday and kept oil prices at a
near 27-month peak.
Wall Street looked set to join in with gains at the open.
The dollar was flat and the euro gained.
Monday's U.S., Chinese and European PMI manufacturing data
continued to boost risk sentiment across financial markets along
with the "January effect" that occurs as fund managers dispense
with the need to settle end-of-year balances.
Some investors were also looking ahead to Friday's U.S. jobs
data, expecting to see the world's largest economy in an
improving state of health.
"People are starting to recognise there is some improvement
in the employment picture in the United States. You would expect
to see some of the confidence of the (manufacturing) PMI to be
reflected in the non-farm payrolls," said Philip Isherwood,
European equities strategist at Evolution Securities.
World stocks as measured by MSCI <.MIWD00000PUS> were up 0.4
a percent on the day for a 1 percent gain in the first two
trading days of the year. Emerging market stocks <.MSCIEF>
lagged behind but were up 0.3 percent on the day.
Europe was a main driver with the FTSEurofirst 300 <>
up 1.3 percent. Part of the gain came from UK stocks catching up
after a holiday on Monday and from energy stocks rising on
higher oil prices.
Earlier, Japan's Nikkei <> began the year with a 1.7
percent climb to a 7-1/2 month closing high.
"Investors may stay cautious before U.S. jobs data this
Friday, but they are optimistic overall," said Hiroichi Nishi,
general manager at Nikko Cordial Securities.
Recent bullishness about the global economy has pushed up
the price of crude oil, which hovered near its highest levels in
more than two years.
U.S. crude for February <CLc1> rose 27 cents to $91.82 a
barrel, close to Monday's peak of $92.58, which was the highest
intraday price since early October 2008.
"Oil sentiment has turned decidedly bullish, partly driven
by unusually cold weather, but more due to an increasingly
optimistic consensus view on 2011 economic performance,
especially for the U.S.," JPMorgan analysts said.
EURO GAINS
The upbeat U.S. manufacturing data lifted the dollar for a
while but it later fell back while the euro gained around a
third of a percent to $1.3393 <EUR=>.
The single currency had dipped as low as $1.3324 earlier on
Tuesday, with some traders citing talk of possible euro-selling
flows related to bond redemptions and coupon payments of euro
zone debt.
Bund futures shed early gains as commodities and equities
continued to benefit from broader signs of an improved economic
outlook.
(Additional reporting by Anirban Nag and Brian Gorman;
Editing by John Stonestreet)
