European shares rose for a sixth straight session and oil bounced above $53 a barrel on Thursday as upbeat U.S. housing and durable goods data boosted expectations of an early return to global economic growth.
Markets benefited from data on Wednesday showing new orders for long-lasting U.S. manufactured goods rose in February for the first time in seven months, and sales of newly-built U.S. single-family homes rose at their fastest pace in 10 months.
The data lifted an already buoyant mood this week following a U.S. plan to persuade private firms to help rid banks of up to $1 trillion in toxic assets.
European banking stocks have enjoyed a stellar week, with investor appetite returning, said Chris Hossain, senior sales manager at ODL Securities.
Looking at the broader market, the re-emergence of some M&A activity gives some credence to the notion that we are bouncing off bottoms.
The FTSEurofirst 300 index of top European shares rose 0.4 percent to 746.97, and global stocks were up 0.35 percent at 208.86.
The renewed optimism fed into demand for riskier assets. Asian equities and global emerging equities hit 11-week highs, and emerging sovereign debt spreads were trading around their narrowest since November.
Oil rose 77 cents a barrel to $53.53, though analysts see it stabilizing around these levels.
Inventories are up at their highest since 1993 as demand is weaker. The oil markets are reacting to the stronger economy but prices should stay in the $50s for the time being, said Tetsu Emori, fund manager at Astmax Co Ltd.
The U.S. dollar steadied against major currencies after tumbling overnight on comments from U.S. Treasury Secretary Timothy Geithner that he was open to expanding the use of the International Monetary Fund's special drawing rights, appearing to endorse an idea put forward by China.
But the dollar pared losses after Geithner reiterated that he expected the currency to remain the top reserve currency for a long time.
The dollar was steady against the euro at $1.3582 and around 0.5 percent higher against the yen at 97.42.
Increasing risk appetite is taking away some demand for safe-haven debt, and bonds are also being undermined by concerns of massive government supplies to fund stimulus plans.
Britain suffered its first failed government bond auction since 2002 and a U.S. five-year Treasury note sale drew lukewarm demand on Wednesday, raising fears about market appetite for new paper.
June Bund futures fell 21 ticks to 122.76.
(Additional reporting by Atul Prakash in London and Maryelle Demongeot in Singapore; Editing by Andy Bruce)