* MSCI global stocks index hits highest since Dec. 7
* European shares at three-month high after Asian gains
* Oil rises, lifting investor appetite for risky assets
* Higher oil lifts commodity currencies vs U.S. dollar
By Nigel Stephenson
LONDON, April 19 (Reuters) - Global stocks reached their
highest levels since early December on Tuesday as oil prices
rose, driven by a strike in Kuwait, and signs of economic
stabilisation in China improved demand for risky assets.
MSCI's All Countries World Index .MIWD00000PUS , which
tracks shares in 45 countries, rose as high as 407.45 points,
its highest since Dec. 7, on strong gains in Europe and Asia.
Wall Street looked set to join the party, with index futures
ESc1 1YMc1 SPc1 suggesting stocks would open 0.3 to 0.5
percent higher.
The rise in oil prices, largely driven by a strike that
nearly halved output from Kuwait, drove the Australian dollar to
a 10-month high and boosted other commodity-linked currencies
against the U.S. dollar.
The strike overshadowed the weekend failure in Doha of
producers to agree to freeze output, cutting Kuwaiti production
to 1.1 million barrels per day from 2.8 million in March.
However, an official of the state refiner said output would be
restored in coming days
Brent crude LCOc1 , the international benchmark, last
traded at $43.76 per barrel, up 85 cents.
"It is quite amazing how oil prices have recovered from
Monday's lows. That is shoring up risk appetite and pushing up
commodity-linked currencies," said Niels Christensen, an FX
strategist at Nordea. "As long as oil remains above $43 a
barrel, we think commodity currencies will remain supported."
Oil's rise from the lows around $27 touched in February,
along with signs of strength in the U.S. and Chinese economies
and the U.S. Federal Reserve's cautious approach to raising
interest rates, have helped lift stocks in recent weeks.
The pan-European FTSEurofirst 300 share index .FTEU3 rose
1.3 percent, led to a three-month high by gains in basic
resources stocks .SXPP . The FTSEurofirst is up 14 percent from
February lows.
The possibility that China is stabilising is reassuring
markets, said Lorne Baring, managing director at B Capital
Wealth Management in Geneva, cited positive signals from China.
Britain's resources-heavy FTSE 100 .FTSE added just 0.3
percent, held back by a 0.6 percent rise in sterling against the
dollar GBP= .
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was up 1.1 percent, after touching its highest
intraday levels since early November.
Tokyo's Nikkei .N225 gained 3.7 percent, Australian shares
.AXJO climbed to their highest since early 2016 and New
Zealand shares .NZ50 reached a new record high.
In China, both the CSI 300 .CSI300 and the Shanghai
Composite .SSEC indexes closed 0.3 percent higher.
Emerging market stocks measured by MSCI .MSCIEF rose 0.8
percent and EM currencies broadly gained. Oil exporter Russia's
rouble RUB= gained 1 percent to 65.50 per dollar and the South
African rand ZAR= rose 1.2 percent to 14.3 per dollar, a 4
1/2-month high.
Brazil's currency, the real BRBY , gained 1 percent against
the dollar. It had weakened on Monday after the central bank
intervened to prevent it rising sharply following a vote to send
President Dilma Rousseff to trial in the Senate.
The Australian dollar AUD= rose 0.5 percent to $0.7787,
having earlier hit its strongest since June at $0.7802. The
Canadian dollar CAD= hit its highest since July.
The U.S. dollar edged 0.2 percent lower against a basket of
currencies .DXY . The euro EUR= was up 0.2 percent to $1.1333
but the safe-haven yen, which last week strengthened to 17-month
highs around 107.61 per dollar, fell 0.6 percent to 109.36.
CAUTIOUS
Assurances from Chair Janet Yellen that the Fed would be
cautious in raising rates have held the dollar in check lately.
No move is expected when the Fed meets next week, but investors
will be watching for suggestions of an increase in June.
European Central Bank policymakers meet on Thursday.
Government bond yields rose with stocks. In the euro zone,
Italian yields IT10YT=TWEB rose before an auction and Spanish
10-year yields ES10YT=TWEB rose 2.8 basis points to 1.53
percent after political parties again failed to form a
government, following an inconclusive election in December.
Copper prices CMCU3 , which have benefited from signs of
economic recovery in China in recent weeks, dipped 0.4 percent
to $4,809 a tonne.
Gold XAU= rose as the dollar weakened. It last traded at
around $1,243 an ounce.