GLOBAL MARKETS-Economy hopes push stocks higher, dollar gains

                                
 * Global stocks rise on economy hopes
                                
 * Europe up 0.4 percent, Japan gains 2.7 percent
                                
 * Dollar generally stronger
                                
 * Euro zone bonds weak on issuance worries
                                
 
                                
 By Jeremy Gaunt, European Investment Correspondent
                                
 LONDON, Feb 4 (Reuters) - World stocks put in modest to
strong gains on Wednesday with emerging markets leading the
field as investors showed tentative confidence that the global
economy will begin to improve.
                                
 The dollar was slightly firmer against a basket of major
currencies <.DXY>.
                                
 European shares were generally higher with the pan-European
FTSEurofirst 300 <.FTEU3> gaining 0.4 percent. Earnings results
were mixed on the day but traders said some have not been as bad
this season as expected.
                                
 There was an improved mood in Asia, following a rise in
China's official manufacturing index.
                                
 Investors also welcomed the U.S. Federal Reserve's extension
of its programme to extend dollars to markets worldwide, and
signs the U.S. Senate was moving forward on a package intended
to revive growth in the world's largest economy. [ID:nN03404937]
                                
 "We're seeing gains on hopes China's economy may be ready to
start improving, along with rises in Chinese shares," said
Tomomi Yamashita, a fund manager at Shinkin Asset Management in
Japan.
                                
 Japan's benchmark Nikkei average <.N225> closed up 2.7
percent. Emerging market shares as measured by MSCI were up 1.4
percent <.MSCIEF> while MSCI's main global index <.MIWD00000PUS>
gained 0.4 percent.
                                
 The latter is down nearly 8 percent for the year to date,
but has been trading in a relatively narrow range for three to
four weeks.
 U.S stocks rose on Tuesday on hopes U.S. lawmakers were 
closer to agreeing an economic stimulus package. [.N]
                                
 The dollar and yen picked up steam again with investors
favouring the relatively safer currencies after a bout of risk
taking.
                                
 "We've had quite a few bits and pieces of risk-positive news
over the past 48 hours and the risk-takers have thought that's
probably about as much as the market is going to get over the
next few days," said Geoffrey Yu, currency strategist at UBS in
London 
                                
 The dollar index, which tracks the U.S. unit against a
basket of currencies, was up 0.2 percent on the day at 85.190
<.DXY> after falling more than 1 percent on Tuesday.
                                
 Yen strength took the euro down 0.7 percent to 115.52 yen
<EURJPY=R>. The single currency was down half a percent against
the dollar at $1.2974 <EUR=>, while sterling lost 0.5 percent to
$1.4389 <GBP=>.
                                
 A key concern on euro zone debt markets remained debt
issuance, likely to be boosted by countries requiring cash for
bailout plans.
                                
 Prices slipped, pushing the two-year Schatz yield <EU2YT=RR>
up 2 basis points at 1.524 percent and the 10-year Bund yield
<EU10YT=RR> up 1 basis point to 3.365 percent.
 
                                
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(Additional reporting by Rafael Nam and Veronica Brown)