* Oil rises above $71 a barrel
* Dollar, U.S. govt bond prices slip
* MSCI world stocks on course for best ever quarterly gains
By Dominic Lau
LONDON, June 26 (Reuters) - Commodity prices and world
stocks rose while the U.S. dollar and government bond prices
slipped on Friday when investors cautiously put money back into
riskier assets.
U.S. crude prices <CLc1> raced above $71 a barrel, extending
a 2 percent gain the day before, after rebel attacks on Nigerian
oil facilities disrupted supply.
Firmer oil prices supported metal prices, with gold <XAU=>
edging above $940 to a one-week high.
Global equities were also in demand, with the MSCI world
equity index <.MIWD00000PUS> advancing 0.9 percent and the
pan-European FTSEurofirst 300 <> up 0.2 percent.
The MSCI world equity index is up more than 21 percent this
quarter, on track for the biggest quarterly gain in its 20-year
history.
"It is clear that the rebound in global equity markets has
lost some steam," Barclays Wealth said in a note.
"It appears to us that stocks are now broadly fairly valued,
having erased their previous undervaluation faster than
expected. Further share price gains may well relate more closely
to the rate of underlying profit growth and the economic cycle."
U.S. stock index futures <DJc1> <SPc1> <NDc1> were down
between 0.2 and 0.3 percent, indicating a softer open on Wall
Street.
Tokyo's Nikkei average <> added 0.8 percent, shrugging
off a record 1.1 percent fall in consumer prices in the year to
May -- another sign falling demand is pushing the economy deep
into its second spell of deflation this decade.
"Most people will agree now that we won't revisit the low
point that we have seen this year any time soon," said Luc Van
Hecka, chief economist at KBC Securities.
"But there are still some problems to be resolved in the
financial sector and as long as that is not out of the way in a
convincing manner, we could still have intermediate
corrections."
UBS <UBSN.VX> <UBS.N>, the world's largest wealth manager,
said it planned to raise about 3.8 billion Swiss francs ($3.46
billion) by selling stock and expected to post a second-quarter
net loss. []
The likelihood of a long road to global economic recovery
remained a challenge to companies. Boeing Co <BA.N>, the world's
No. 2 plane-maker, suffered another heavy blow to its Dreamliner
project when a major customer, Australia's Qantas Airways
<QAN.AX>, scrapped and deferred orders for 30 new planes.
DOLLAR SLIPS
The dollar fell against a basket of currencies, extending
losses made the previous day after the U.S. Federal Reserve gave
no hint of an imminent exit from low interest rates and other
bold measures to stoke growth.
The euro <EUR=> was up 0.6 percent against the dollar at
$1.4085, while the greenback fell 0.5 percent to the yen. <JPY=>
"Risk sentiment is back in full force," said Christian
Lawrence, currency strategist at RBC Capital Markets. "The
dollar is being sold across the board."
Yields on the benchmark 10-year U.S. Treasury <US10YT=RR>
added 2 basis points, while the 10-year euro zone benchmark
<EU10YT=RR> bund yield was unchanged at 3.428 percent.
In one measure of how investor sentiment has improved, the
CBOE Volatility Index <.VIX>, a gauge of investor anxiety, on
Thursday closed at its lowest level since just before Lehman
Brothers filed for bankruptcy protection last September.
(Additional reporting by Tamawa Desai; Editing by Ruth
Pitchford)
