* Stocks up in Asia, Europe; MSCI world equity index steady
* Buffett invests $5 bln in Goldman Sachs
* Mood still fragile on uncertainty over Washington bailout
(Releads with fresh prices, adds Ifo)
By Natsuko Waki
LONDON, Sept 24 (Reuters) - Stocks rose in Asia and Europe
on Wednesday after Warren Buffett's investment in Goldman Sachs
<GS.N>, while safe-haven government bonds rose as uncertainty
remained over Washington's $700 billion bank bailout.
Billionaire investor Buffett's Berkshire Hathaway Inc
<BRKa.N> <BRKb.N> will invest $5 billion in Goldman, a major
boost for the Wall Street bank whose shares fell 50 percent from
their 2007 record high in this month's market turmoil.
"Buffett's legendary status as a value investor gives the
bulls reason for optimism, as some will see his move as a sign
to call the bottom of the recent declines," said Chris Hossain,
senior sales manager at ODL Securities.
However, the news failed to significantly boost risky assets
after the U.S. government's push for quick congressional
approval of its financial rescue plan hit a wall of opposition
on Tuesday among senators who said the plan puts taxpayers at
risk.
Federal Reserve chairman Ben Bernanke testifies again later,
after warning lawmakers on Tuesday that a failure to act could
doom the economy to a recession.
"We are seeing people reduce the risk aversion play in the
short term," said Lee Hardman, currency economist at Bank of
Tokyo-Mitsubishi-UFJ.
"People will likely stick in relatively tight ranges on
uncertainty over the bailout plan... The only thing that is
certain right now is uncertainty."
The FTSEurofirst 300 index <> rose 0.4 percent while
the MSCI world equity index <.MIWD00000PUS> was broadly steady.
U.S. stock futures <SPc1> were up more than 1 percent,
pointing to a stronger start on Wall Street later.
The December bund future <FGBLc1> rose 50 ticks as jittery
investors sought safety in government bonds.
A survey showing German corporate sentiment deteriorated for
the fourth month running in September added to gloom over the
euro zone economy, which has moved half way into recession after
second-quarter growth contracted.
Strains in the interbank money market lingered, with
overnight dollar rates <USDOND=> rising 195 basis points above
the Fed's target rate at one point, before falling to stand
around 25 bps above the benchmark rate.
The Fed moved for the second time within 24 hours to provide
liquidity, acting in concert with Australia and Scandinavia,
while the euro zone, Britain, Japan and Australia injected
billions of dollars into their banking systems.
Once a byword for safety and liquidity, the short-term
lending market where banks lend to each other has repeatedly
seized up in the financial crisis because of increasing worries
over the creditworthiness of borrowers.
The dollar <.DXY> was steady against a basket of major
currencies while the euro rose 0.1 percent to $1.4666 <EUR=>.
Emerging sovereign spreads <11EMJ> tightened 1 basis points
while emerging stocks <.MSCIEF> rose 0.3 percent on the day.
U.S. light crude <CLc1> rose 1.6 percent following forecasts
of a drop in U.S. crude stocks. Gold rose <XAU=> edged lower to
$887.80 an ounce.
(Additional reporting by Atul Prakash and Tamawa Kadoya)
