(Tweaks headline to read "stocks")
* Oil lifts stocks off lows but main indexes still fall
* Wall St set to open higher, futures indicate
* Germany sells five-year bonds at record low yield
* Yen gains vs dollar as risk-averse investors seek shelter
By Nigel Stephenson
LONDON, Feb 3 (Reuters) - A rise in oil prices on Wednesday
failed to lift European stocks, which instead sagged on weak
earnings, prompting investors to seek safety in the Japanese
yen, gold and low-risk government debt.
U.S. crude CLc1 moved back above $30 a barrel and global
benchmark Brent rose 52 cents to $33.24 after Russia reiterated
its openness to talking with OPEC about output cuts - but only
after a third consecutive day of oil price losses in Asia had
weighed on regional stock markets.
Wall Street, however, looked set to open about 0.2 percent
higher, according to index futures SPc1 ESc1 1YMc1 .
Oil prices, down 70 percent in the last 18 months as
investors have fretted about global growth and an economic
slowdown in China, have been a major factor behind a torrid
start to the year for stocks.
The pan-European FTSEurofirst 300 index .FTEU3 is down
nearly 10 percent this year while the U.S. S&P 500 .SPX has
lost 6.9 percent.
Market turmoil has in turn boosted expectations of further
central bank stimulus measures. The Bank of Japan (BOJ) last
week became the latest major central bank to introduce negative
interest rates. Many in markets expect the European Central Bank
(ECB) will ease policy further next month.
"There is still a lot of vulnerability in stock markets and
the euro remains quite strong, which is adding pressure on the
ECB to take action," BNP Paribas (PA:BNPP) European rate strategist,
Patrick Jacq said.
The FTSEurofirst 300 stocks index .FTEU3 fell 0.3 percent
on Wednesday, hit by weak earnings reports, although Swiss seeds
and pesticides group Syngenta SYNN.VX rose 6 percent after
ChemChina agreed to buy the company for $43 billion.
Germany's DAX index .GDAXI slid 1 percent and Britain's
FTSE 100 .FTEU3 was off 0.5 percent.
Data on Wednesday showed euro zone businesses had a
disappointing start to 2016, with growth in January matching the
worst seen last year.
On Wednesday, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS fell 1.7 percent.
Japan's Nikkei .N225 closed down 3.2 percent, hit by weak
oil and a strong yen, wiping out almost all the gains it made
after the BOJ became the latest major central bank to introduce
negative interest rates.
Chinese shares .CSI300 .SSEC dipped 0.4 percent.
Stock market weakness has driven investors into the shelter
of low-risk government debt. Two-year yields on bonds from euro
zone benchmark issuer Germany DE2YT=TWEB and Japanese five-
and 10-year yields JP10YTN=JBTC hit record lows on Wednesday.
Yields on 10-year U.S. Treasury bonds US10YT=RR hit
10-month lows on Tuesday.
Germany sold nearly 4 billion euros of five-year binds at a
record low yield at auction of -0.24 percent.
"Record low yields don't appear to be giving people a
headache and at the margin the auction is supportive for the ECB
to do what is currently expected, which is a 10 basis point cut
in the deposit rate next month," said Commerzbank (DE:CBKG) rate
strategist David Schnautz.
German 10-year yields DE10YT=TWEB were last flat on the
day at 0.31 percent.
YEN FAVOURED
In currency markets, the Japanese yen JPY= , which tends to
be bought by investors in times of risk aversion, was 0.4
percent stronger on the day at 119.58 per dollar. It hit a
six-week low of 121.70 per dollar after the BOJ's policy meeting
on Friday.
"Risk sentiment is pretty fragile, so we are seeing yen
being supported," ING currency strategist Petr Krpata said.
The Chinese yuan CNH= weakened to a three-week low against
the dollar, hurt in part by expectations of a major currency
transaction for ChemChina's bid for Syngenta.
The euro EUR= was flat at $1.0917 while sterling GBP= ,
which touched a three-week high on Tuesday after European
Council President Donald Tusk presented proposals to keep
Britain in the European Union, firmed 0.6 percent to close to
$1.45, a three-week high.
Gold XAU= , also viewed as a safe-haven by investors, held
close to three-week highs. It last traded at $1,127.50, flat on
the day.