World stocks rally on hunt for risk, yen soft

In the absence of market moving U.S. data on Wednesday, investors will focus on speeches by Federal Reserve officials and movements in oil prices -- which fell from this week's 10-month high -- for their impact on risk appetite.

Soft U.S. data over the past week has erased expectations for a growth-dampening U.S. interest rate hike, which was triggered by a jump in bond yields earlier this month.

"There is some relaxation about possible consequences of the rise in bond yields and how far this might go," said Gerhard Schwarz, strategist at HVB/UniCredit in Munich.

"Yields have moved significantly over the last few days, and that is coupled with signs that inflation may not be this imminent problem many had feared."

MSCI's main world equity index rose 0.3 percent, closing in on a lifetime high set earlier in June.

The pan-European FTSEurofirst 300 index was up 0.6 percent, having hit a 6-1/2 year high earlier this week. Shares in Clariant and Ciba rose after the head of U.S. peer Huntsman expressed interest in buying them.

U.S. stock futures were higher, indicating a firmer start on Wall Street.

Tokyo stocks ended up a quarter percent, while Hong Kong and Singapore hit new highs at one point. MSCI's broadest index of shares ex-Japan hit a record high.

CARRY IN VOGUE