* World stocks hit fresh 28-month high
* Euro holds gains
* Spanish, Italian bond sale demand strong
By Jeremy Gaunt, European Investment Correspondent
LONDON, Jan 13 (Reuters) - World stocks climbed to a new
28-month high despite weakness in Europe on Thursday while the
euro held on to the previous session's gains as bond auctions in
Spain and Italy went without a hitch.
Wall Street looked set to open moderately lower.
The bond auctions followed Wednesday's smooth sale of
Portuguese debt and took the edge off concerns about the ability
of debt-strapped euro zone issuers to fund themselves.
Spain sold 3 billion euros of five-year bonds
<ES00001166=MF>, raising the maximum amount targeted. The yield
was higher than at a previous auction in November but lower than
recent secondary market levels.
"It's been successful, the most positive has been reaching
the top end of the objective and the bid-to-cover ratio of 2.1
is higher than the previous auction," said Soledad Pellon, an
analyst at IG Markets.
"The success is due to national and international support
and has been taken favourably by the markets."
Italy's auction of 7 billion euros of 5- and 15-year
government bonds <IT465627=><IT464473=> also went well, if
anything slightly better than Spain's.
Recent worries about the sustainability of the euro zone's
debt-strapped economies have eased, partly because a European
Union finance ministers meeting next week is likely to address
new support mechanisms.
Promises from China and Japan to support Europe through its
fiscal crisis have also helped ease worries about the euro
zone's financing troubles.
One result has been a rebound in the euro from recent lows.
It hit a one-month high against the Swiss franc on Thursday, for
example, and was above $1.31 <EUR=>, compared with recent
trading below $1.29.
"We're wary of positioning for euro downside too
aggressively because there seems to be more and more news that
Germany and France are going to push through some emergency
resolution package," said Geoffrey Yu, currency strategist at
UBS.
The European Central Bank meets later in the day but is
expected to keep interest rates unchanged at 1.0 percent,
leaving the focus on the ECB's bond-buying programme and an
acceleration in euro zone inflation.
BUOYANT STOCKS
Outside Europe, stocks were generally higher, lifted by the
easing euro zone fears, an improving global economy and positive
corporate earnings.
Intel Corp <INTC.O> is to report quarterly results later.
World stocks as measured by MSCI <.MIWD00000PUS> were up 0.2
percent having earlier hit a fresh 28-month high and emerging
market stocks <.MSCIEF> climbed to a 31-month peak.
This came despite losses in Europe, where the FTSEurofirst
300 <> lost half a percent in what was likely to be
profit-taking after a run that has given it a 3.25 percent gain
this year.
Japan's Nikkei <> closed up 0.7 percent, at a new
eight-month high.
(Additional reporting by Naomi Tajitsu; Editing by Toby Chopra)
