* World stocks at new 28-month highs
* Euro gains, Russia says may buy debt
By Jeremy Gaunt, Europe Investment Correspondent
LONDON, Jan 18 (Reuters) - World stocks hit a fresh 28-month
high on Tuesday, while the euro climbed on hopes for an easing
of the euro zone debt crisis.
Euro zone leaders were attempting to thrash out an agreement
on beefing up a rescue plan for indebted countries although no
sign of agreement at Monday's meeting. Russia said it may be
interested in buying bonds from the rescue fund, the European
Financial Stability Facility (EFSF).
The euro rose more than half a percent to $1.3376 <EUR>.
Investors are keen to see euro zone countries provide more
money for the EFSF to ensure that there is enough to cover any
contagion into large economies such as Spain.
Analysts in a Reuters poll expected euro zone policymakers
to increase the firepower of the EFSF by 260 billion euros to
reach 700 billion euros. []
It appeared, however, that EU ministers would not come up
with a new package until leaders' meetings in February or even
March. Investors have nonetheless been stepping back from their
worst case scenarios vis-a-vis the crisis.
"Players are not too keen to push the euro much lower," said
Paul Mackel, director of currency strategy at HSBC. "I am not
too sure if it has the legs to test recent highs given all the
uncertainty surrounding talks on the euro zone safety fund."
Euro zone government bonds sold off slightly, lifting
yields.
NEW HIGHS
World stock markets, in the meantime, were relatively
oblivious to the euro zone debate, focusing on signs of greater
global economic growth and positive earnings reports.
MSCI's all-country world index <.MIWD00000PUS> hit a new
high, touching levels last seen in late August 2008. It was up
0.9 percent on the day.
Developed markets outperformed emerging bourses, continuing
recent trends. Attention has shifted among some investors
towards recovering developed economies and away from emerging
markets, which as seen as a slightly crowded trade.
Goldman Sachs told an investor conference on Monday, for
example, that it expected U.S. and Japanese stocks to outperform
in the first half of 2011, with European and emerging stocks
taking over in the second.
The FTSEurofirst 300 <> was up 0.8 percent, at a
28-month high.
"The markets are waiting for an opportunity to move ahead
rather than looking for an opportunity to take profits," said
Mike Lenhoff, chief strategist at Brewin Dolphin.
"The backdrop is still very supportive. This week is a very
big week for corporate earnings in the U.S. and on balance, the
results should be quite good."
Japan's Nikkei <> earlier closed up 0.15 percent.
(Additional reporting by Anirban Nag and Atul Prakash, editing
by Mike Peacock)
