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.
The dollar was slightly firmer against a basket of major currencies.
European shares were generally higher with the pan-European FTSEurofirst 300 gaining 0.4 percent. Earnings results were mixed on the day but traders said some have not been as bad this season as expected.
There was an improved mood in Asia, following 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.
"We're seeing gains on hopes China's economy may be ready to start improving, along with rises in Chinese shares," said Tomomi Yamashita, a fund manager at Shinkin Asset Management in Japan.
Japan's benchmark Nikkei average closed up 2.7 percent. Emerging market shares as measured by MSCI were up 1.4 percent while MSCI's main global index gained 0.4 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. U.S stocks rose on Tuesday on hopes U.S. lawmakers were closer to agreeing an economic stimulus package.
The dollar and yen picked up steam again with investors favouring the relatively safer currencies after a bout of risk taking.
"We've had quite a few bits and pieces of risk-positive news over the past 48 hours and the risk-takers have thought that's probably about as much as the market is going to get over the next few days," said Geoffrey Yu, currency strategist at UBS in London
The dollar index, which tracks the U.S. unit against a basket of currencies, was up 0.2 percent on the day at 85.190 after falling more than 1 percent on Tuesday.
Yen strength took the euro down 0.7 percent to 115.52 yen. The single currency was down half a percent against the dollar at $1.2974, while sterling lost 0.5 percent to $1.4389.
A key concern on euro zone debt markets remained debt issuance, likely to be boosted by countries requiring cash for bailout plans.
Prices slipped, pushing the two-year Schatz yield up 2 basis points at 1.524 percent and the 10-year Bund yield up 1 basis point to 3.365 percent.
(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)
