GLOBAL MARKETS-Stocks rally, euro up as Portugal seen contained

* MSCI world index reclaims level before Japan disasters

* Nikkei futures point to gains in Tokyo, break key level

* Sterling hits 2011 low vs currency basket

* Gold turns lower after hitting record high
(Updates to U.S. market close, changes quotes, adds detail)

By Rodrigo Campos

NEW YORK, March 24 (Reuters) – Global stocks rose for a
sixth consecutive session on Thursday, recouping the losses
after Japan’s natural disasters, while the euro jumped on
optimism that European policymakers will be able to control a
political and debt crisis in Portugal.

U.S. stocks rose for a second day on optimism about
upcoming earnings and as the quarter’s top performers drew
buyers.

Some investors, however, continued to seek out safety,
driving gold to a record high of $1,447.40 an ounce, before
turning lower as investors took profits. Worries mounted about
the ongoing violence in the Middle East and fears that Portugal
will, in fact, need a bailout.

Oil prices wobbled as U.N.-mandated air strikes hit Libya
for a fifth night, but failed to stop Muammar Gaddafi’s tanks
from shelling rebel-held towns. A report a French plane had
taken down a Libyan jet raised more worries of a long supply
outage.

In Syria, anger mounted as forces fired on protesters,
killing at least 37, forcing President Bashar al-Assad to
pledge greater freedoms.

Fitch cut Portugal’s credit ratings by two notches, saying
risks to the country’s financing rose after parliament failed
to pass fiscal consolidation measures and the prime minister
resigned. The euro was strong despite mounting pressure on
Lisbon to seek a bailout.

Portugal’s political crisis dominated the start of an EU
summit on Thursday, further complicating efforts to solve the
euro zone’s debt problems. [ID:nLDE72N0NZ].

“The Portugal story was pretty much priced in,” said
Samarjit Shankar, managing director of global FX strategy at
BNY Mellon in Boston. “Given the rapid events in Portugal and
the fall of the government, there might be something that comes
out of the summit today and tomorrow.”

STOCKS BET ON ECONOMIC RECOVERY

Equity markets gained on bets on a continued economic
recovery that were coupled with the end of an upbeat quarter.
Light volume continued, however, underscoring caution.

Phil Orlando, chief equity market strategist at Federated
Investors in New York said stock markets still face headline
risk.

“But it’s entirely possible the market feels comfortable
that this 7 percent correction we saw from mid-February into
mid-March has priced those concerns in, and now we are starting
to look forward to the prospect of continued economic growth
and solid first-quarter profits,” he said.

The Dow Jones industrial average (.DJI: Quote, Profile, Research) added 84.54 points,
or 0.70 percent, to 12,170.56. The Standard & Poor’s 500 Index
(.SPX: Quote, Profile, Research) gained 12.12 points, or 0.93 percent, to 1,309.66. The
Nasdaq Composite Index (.IXIC: Quote, Profile, Research) rose 38.12 points, or 1.41
percent, to 2,736.42.

The MSCI All-Country index (.MIWD00000PUS: Quote, Profile, Research) climbed 0.9
percent, rising for six successive trading days for a gain of
4.8 percent.

In Europe shares rose to a two-week closing high, with the
FTSEurofirst 300 (.FTEU3: Quote, Profile, Research) gaining 1 percent, led by gains in
two major British retailers.

U.S. dollar-denominated Nikkei futures (NKc1: Quote, Profile, Research) rose more
than 1.1 percent to trade above the key 9,500 level, pointing
to a rebound in Tokyo after a 0.15 percent dip on the Nikkei
(.N225: Quote, Profile, Research) Thursday.

Surveys showed economic recovery continued in March,
shrugging off Japan’s disaster, although turmoil in the Middle
East is pushing prices higher. [ID:nLDE72N0KH]

The global economic recovery will continue through the rest
of the year despite the recent unrest in the Middle East and
the disaster in Japan, Barclays Capital said in a note, but
signs of higher inflation and an increased probability of
policy tightening called for caution. [ID:nL3E7EO2HO].
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Reuters polls on world stock markets [ID:nLDE72K1HU] Q+A-What's next for Portugal? [ID:nLDE72N00Q] World economic growth, inflation http://r.reuters.com/bex68r Euro zone PMI, earnings momentum http://r.reuters.com/qew68r European sovereign debt crisis: http://r.reuters.com/hyb65p Japan earthquake in graphics http://r.reuters.com/fyh58r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The euro (EUR=EBS: Quote, Profile, Research) was up 0.6 percent against the dollar at
$1.4170, after earlier falling to a low of $1.40534 on trading
platform EBS.

Sterling fell to its lowest this year against a basket of
currencies in the wake of weak UK retail sales data and a
warning by Moody’s on risks to economic growth.

Trade-weighted sterling (=GBP: Quote, Profile, Research) fell as low as 79.6, its
lowest since Dec. 31. Versus the greenback (GBP=D4: Quote, Profile, Research) it traded
down 0.8 percent at $1.6107.

The yen was steady against the dollar at 80.95 yen (JPY=: Quote, Profile, Research),
although market players are still wary Japan may intervene to
sell the currency if the dollar breaches 80 yen.

Spot gold (XAU=: Quote, Profile, Research) dipped 0.6 percent to $1,428 an ounce at
2025 GMT after investors took profits following bullion’s rise
to a record high. Silver (XAG=: Quote, Profile, Research) also fell after earlier hitting
a 31-year high of $38.13.

U.S. crude (CLc1: Quote, Profile, Research) zigzagged throughout the session before
settling down 15 cents per barrel at $105.60 as investors took
profits after a recent rally on supply worries. Brent (LCOc1: Quote, Profile, Research)
rose 17 cents to settle at $115.72 a barrel, having traded from
$114.50 to $115.92. [O/R]
(Reporting and writing by Rodrigo Campos; Additional reporting
by Tenzin Pema, Gene Ramos, Chuck Mikolajczak, Julien
Toyer,Wanfeng Zhou and Jessica Mortimer; Editing by Leslie
Adler)

GLOBAL MARKETS-Stocks rally, euro up as Portugal seen contained