Strong company results and hopes for a settlement in the U.S. debt ceiling row boosted global equities on Wednesday while currency markets remained on edge over the euro zone debt crisis.
Gold retreated from a record high of $1,609.51, but was still well toward the top of recent trading levels. It has been boosted by both the U.S. and European debt fears.
World stocks as measured by MSCI <.MIDW00000PUS> were up 0.4 percent, adding to Tuesday's gains and led by emerging markets <.MSCIEF>, which gained 0.8 percent.
It's important that there are slightly more positive tones coming out of Capitol Hill, at least averting an immediate issue with their debt ceiling, said Lothar Mentel, chief investment officer at Octopus Investments.
We're within the trading range, driven by good and bad news. The U.S. earnings season will be a positive catalyst and gives us more perspective, compared to the worries and concerns about the euro zone debt crisis.
President Barack Obama suggested on Tuesday that progress was being made toward a $3.75 trillion deficit reduction deal, easing worries that lawmakers may fail to lift the U.S. debt ceiling.
Earnings have also boosted stock sentiment. After Wall Street closes, Apple
In Europe, the FTSEurofirst 300 <.FTEU3> gained half a percent, cutting its year-to-date losses to around 3.5 percent.
Earlier, Japanese stocks marked their biggest daily rise in three weeks.
The Nikkei <.N225> closed up 1.2 percent.
EU SUMMIT AHEAD
The euro was steady against the dollar, with investors hopeful EU leaders will reach some kind of deal to ease Greece's debt problems at a summit on Thursday, but doubtful that this would ease fears of contagion.
The single currency was up 0.1 percent at $1.4166.
French Finance Minister Francois Baroin said the summit needed to send a strong message and that views among leaders were less divergent than media were reporting, after German Chancellor Angela Merkel said hopes for a single plan to solve Greece's crisis were unrealistic.
Euro zone bond markets were also seeing risk-aversion plays ease as the summit approached.
Core German debt prices inched lower and their yield spread against Spanish and Italian bonds, recently under severe pressure, narrowed.
Italy's 10-year yield was down nearly 10 basis points at less than 5.7 percent. It rose above 6 percent earlier in the week.
(Additional reporting by Brian Gorman; Written by Jeremy Gaunt; Editing by John Stonestreet)