World stocks put in modest to strong gains on Wednesday with emerging markets leading the field as investors showed tentative confidence that the global economy will begin to improve.
Wall Street looked set for a positive and the dollar was slightly firmer against a basket of major currencies.
Fitch Ratings reminded investors, meanwhile, of the problems facing many countries when it downgraded Russia.
European shares were generally higher with the pan-European FTSEurofirst 300 gaining 0.8 percent. Earnings results were mixed on the day but traders said some have not been as bad this season as expected.
"There is a body of evidence beginning to accumulate that the worst of the pace of contraction is now behind us," said Philip Shaw, economist at Investec in London.
The improved mood followed reports showing a rise in China's official manufacturing index. Investors also welcomed the U.S. Federal Reserve's extension of its programme to extend dollars to markets worldwide, and signs the U.S. Senate was moving forward on a package intended to revive growth in the world's largest economy.
Japan's benchmark Nikkei average closed up 2.7 percent. Emerging market shares as measured by MSCI were up 1.3 percent while MSCI's main global index gained 0.3 percent.
The latter is down nearly 8 percent for the year to date, but has been trading in a relatively narrow range for three to four weeks.
STUMBLING EURO
The euro stumbled after the Fitch Russia downgrade, while the dollar and yen picked up steam with investors favouring the relatively safer currencies.
Currency strategists said the Fitch move was proving negative for the single currency, with more outflows from Russia seen putting more pressure on the rouble and forcing Russian authorities to sell euros to maintain the balance of its reserves portfolio.
The euro extended early losses to hit a session low against the dollar at $1.2821, according to Reuters data, It was down 1.8 percent at 114.29 yen.
The dollar index, which tracks the U.S. unit against a basket of currencies, was up 1 percent on the day.
Euro zone government bonds reversed losses as investors covered short debt positions after the 10-year Bund yield hit a two-month high in early trade. (To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund Blog click on http://blogs.reuters.com/hedgehub)
