* Wall Street seen up 0.3 percent after jobless claims dip
* European shares rise 0.4 percent but FTSE slides 0.5 pct
* MSCI Asia Pacific index up 1.9 pct, Nikkei gains 2.3 pct
* Oil boosted as Iran voices support for output freeze
* Dollar capped vs yen, euro after Fed Bullard's dovish
comments
* Downbeat jobs data hits Aussie
By Marc Jones
LONDON, Feb 18 (Reuters) - World stocks extended their best
run of the year on Thursday, as a rise in oil prices and
confident talk that EU leaders will reach a deal that will help
keep Britain in the bloc outweighed concerns about the state of
the global economy.
It had been a choppy start for Europe .FTEU3 as EU leaders
prepared for a two-day summit in Brussels. But the mood improved
after European Commission President Jean-Claude Juncker said he
was "quite confident" a deal would be reached.
Germany's Dax .GDAXI and France's CAC 40 .FCHI rallied
along with much of southern Europe to leave London's FTSE
.FTSE the only major market in negative territory even as
sterling GBP= kicked higher. .EU FRX/
Oil was also on the front foot having surged on Wednesday
following a deal between major producers to cap output. O/R
Wall Street was set for its fourth straight rise with upbeat
jobs market data expected to offset disappointing Wal Mart
earning.
The S&P 500 is currently on course for its best week in over
a year. .N
"We have had a positive move across markets which has been
aided by the Juncker statement on the Brexit (Britain exiting
EU) talks that removed some of the dark clouds," said Saxo
Bank's head of FX strategy, John Hardy.
"We've now ticked a lot of the boxes this week that have
been dogging markets. China has set its currency higher, oil is
moving up and now we have the Brexit worries easing."
There were still some jitters. The OECD slashed its economic
forecasts for the United States, Europe and Brazil, while big
oil producers including Saudi Arabia, Brazil and Bahrain were
still shaken by ratings downgrades by Standard & Poor's.
But it couldn't dampen risk appetite with emerging market
stocks at their highest in over a month and lower-rated southern
euro zone debt rallying as bets the European Central Bank is
readying to cut its rates boosted them again. GVD/EUR
The big force for markets appeared to still be oil, however.
Wednesday had seen a more than 7 percent jump in Brent on hopes
that big producers will cap output and though the rally had lost
a bit of momentum, prices inched higher again.
Brent futures LCOc1 topped $35 a barrel, while U.S. crude
CLc1 hit its highest in almost two weeks as it touched $31.60.
"The correlation between oil and equities is still pretty
high," said Societe Generale (PA:SOGN) strategist Alvin Tan.
BULLARD LESS BULLISH
Despite the gains elsewhere, London's FTSE .FTSE was
refusing to shake off its losses as a number of its big
pharmaceutical firms traded ex-dividend and the start of talks
neared in Brussels about the UK's future in the EU.
In the latest draft agreement sent to the bloc's leaders
overnight and seen by Reuters, officials tried to overcome
differences over the most contentious areas of David Cameron's
renegotiation - migration curbs and financial safeguards - but
much was still open for debate in talks that could stretch into
the night.
European Council President Donald Tusk who is chairing the
summit wrote "There will not be a better time for a compromise."
"It is our unity that gives us strength and we must not lose
this. It would be a defeat both for the UK and the European
Union, but a geopolitical victory for those who seek to divide
us."
In the currency markets, the mood remained a little subdued
as the safe-have yen JPY= kicked higher against the dollar
again, while the Australian dollar was the biggest loser
following a larger-than-expected rise in unemployment. FRX/
Sweden's crown SEK= got a boost from
stronger-than-expected inflation. It was particularly strong
against the euro EUR= as minutes from the last European
Central Bank meeting underscored its willingness to cut its
already deeply negative rates again.
Safe-haven gold XAU= was pushed back to $1,206 an ounce by
the revival in risk appetite as industrial metals like copper
CMCU3 climbed.
The dollar, meanwhile, was a touch stronger though it
remained lethargic following comments on Wednesday from one of
the Federal Reserve's traditional 'hawks', James Bullard, that
it would be "unwise" now for the central bank to keep hiking
rates given low inflation expectations and market volatility.
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS jumped 1.9 percent. Tokyo's Nikkei
.N225 gained 2.8 percent, shrugging off the biggest drop in
domestic exports since 2009.
Australian shares .AXJO climbed 2.2 percent and South
Korea's KOSPI .KS11 added 1.1 percent, though Shanghai stocks
.SSEC dipped in a muted reaction to a rise in inflation.
ECONCN
"Recovering oil prices have set the stage for an accelerated
rebound in global stocks, while minutes from the FOMC supported
the mood," said Rhoo Yong-seok, a stock analyst at Hyundai
Securities.
Late on Wednesday, Standard and Poor's delivered the latest
blow to oil producers as it downgraded Saudi Arabia, Brazil,
Kazakhstan, Bahrain and Oman's credit ratings.
The impact was felt almost immediately in Oman as borrowing
costs jumped at an auction of government bonds.