* MSCI world equity index up nearly 1 pct on Lehman hopes
* Gold prices recover more than 2 pct
* Dollar rally stalls as oil peeks towards $102
By Sebastian Tong
LONDON, Sept 12 (Reuters) - World stocks rose more than 1
percent on Friday, buoyed by hopes of a rescue for troubled Wall
Street giant Lehman Brothers <LEH.N>, while oil climbed towards
$102 a barrel as Hurricane Ike headed for the Texas Gulf Coast.
Metals prices also rose, led by spot gold, while a rally in
the dollar stalled.
The MSCI main world equity index <.MIWD00000PUS> gained 1.05
percent to 318.17 amid reports U.S. officials were in intensive
discussions with Lehman that could possibly see the beleaguered
financial firm sold off. []
The FTSEurofirst 300 <> index of top European shares
was up 1.34 percent at 1,156 with banks, notably BNP Paribas
<BNPP.PA> and Credit Agricole <CAGR.PA>, leading the way.
"The whole banking sector will be thrown into the spotlight
in Europe," said David Buik, strategist at BGC Partners.
Lehman, which posted a $3.93 billion third quarter loss on
Wednesday, has seen its shares lose more than three-quarters of
their value since the start of the week, raising fears over the
viability of the 158-year-old firm.
Financial markets hit a volatile patch this week following
the U.S. government's seizing control of mortgage giants Fannie
Mae and Freddie Mac, with Monday's rally giving way to jitters
over the stability of the financial sector.
But the prospect of a Lehman rescue, coupled with news about
possible consolidation in the European banking sector, helped
drive financial stocks higher and propelled the FTSEurofirst 300
<> index of top European shares 1.3 percent higher.
Higher metals prices also provided some support with spot
gold <XAU=> rising more than 2 percent on bargain-hunting.
Comments by German Finance Minister Peer Steinbrueck that
Germany was not in recession also helped bolster appetite for
riskier assets.
Safe-haven Euro zone government bond futures <FGBLc1>
dropped by 50 ticks. []
Emerging shares <.MSCIEF> were 1.23 percent higher while
emerging sovereign debt spreads <11EMJ>, an indicator of risk
aversion, were 4 basis points narrower.
DOLLAR SLIDES
The dollar, which hit a one-year high of 80.375 against a
basket of six currencies on Thursday <.DXY>, was 0.5 percent
softer.
"Today's focus will definitely be what plays out in the
banking sector. The dollar has completely detached from any U.S.
economic fundamentals," said David Powell, currency strategist
at Bank of America in London.
However, both the dollar and yen remain firmly on track for
solid gains this week, fuelled by a general cutting of risk,
unwinding of long-held leveraged positions and falling commodity
prices.
The euro <EUR=>, which tumbled to a year-low versus the
dollar on Thursday, was up 0.7 percent at $1.4126 while the yen
<JPY=> was a quarter percent weaker at 107.43 per dollar.
Oil <CLc1> rose towards $102 a barrel with markets training
a watchful eye on the path of Hurricane Ike which threatens to
disrupt refineries and production in the Gulf of Texas for
weeks.
(Additional reporting by Jamie McGeever, editing by Mike
Peacock)
