GLOBAL MARKETS-World equities rise again on bank hopes

                                
 * European shares up 0.8 percent, shrug off UBS earnings
                                
 * Japan gains 4.5 pct, catch-up from Tuesday global rally
                                
 * Wall Street set for more gains
                                
 * Dollar slips against major currencies
                                
 
                                
 By Jeremy Gaunt, European Investment Correspondent
                                
 LONDON, March 11 (Reuters) - World equity markets shrugged
off early worries about the banking sector on Wednesday to put
in solid gains with Wall Street looking set to join in, a day
after many investors had their best session since December.
                                
 Worries about China's economy, with news of a severely
shrinking trade surplus, were also set aside in a general spree
of bargain hunting.
                                
 MSCI's all-country world index <.MIWD00000PUS> was up 0.8
percent, adding to a 5 percent gain on Tuesday. The U.S. S&P 500
index <.SPX> alone gained nearly 6.4 percent overnight.
                                
 Sentiment in Europe was shaken early by UBS <UBSN.VX>
<UBS.N>, which said its 2008 net loss had risen to 20.9 billion
Swiss francs ($18.06 billion) from the previously reported 19.7
billion francs. [ID:nLB106591]
                                
 But it later recovered with investors looking for oversold
equities, particularly in the banking sector.
                                
 "The market has been latching on to the idea that financials
have priced in the worst. The market has digested UBS and
decided they are not as bad as expected," said Bernard
McAlinden, strategist at NCB Stockbrokers.
                                
The pan-European FTSEurofirst 300 <.FTEU3> was up 0.8
percent, after earlier being down around 1 percent. It gained
more than 5 percent on Tuesday.
                                
 Markets have entered a period of volatile trading in which
good or bad news -- particularly about banks -- triggers sharp
reactions almost daily. Tuesday's gains, for example, were set
off by Citi <C.N> saying that it was profitable in the first two
months of the year.
                                
 Earlier, Japan's Nikkei average <.N225> jumped 4.6 percent,
a day after hitting a 26-year closing low. The benchmark gained
321.14 points to 7,376.12 while the broader Topix <.TOPX> rose
2.7 percent to 722.28.
                                
 UP AND DOWN
                                
 The dollar has also been swinging up and down on short
shifts in sentiment. It was down slightly against a basket of
major currencies after earlier gaining around a quarter of a
percent <.DXY>.
                                
 The currency was initially lifted by safe haven flows after
data showed China's trade surplus shrank to $4.84 billion in
February. This was much lower than forecasts of a $27.3 billion
surplus, and exports slid 25.7 percent on a year ago
[ID:nPEK194920].
                                
 Later, the euro rose 0.4 percent on the day to $1.2718
<EUR=>, having touched a two-week high of $1.2823 on trading
platform EBS on Tuesday.
                                
 On euro zone government debt markets, the 10-year cash Bund
yield <EU10YT=RR> was up 7 basis points at 3.067 percent. The
interest rate-sensitive two-year Schatz yield <EU2YT=RR> was up
3 basis points at 1.357 percent. Bond yields move inversely with
prices.
 (Additional reporting by Joanne Frearson; Editing by Andy
Bruce)
                                
 
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