GLOBAL MARKETS-Shares soothed by stimulus, oil heads higher

* World share index up 0.1%, heading for first weekly loss
in four
* Central bank easing just about supporting sentiment
* Dollar heads for third week of losses
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Wilson
LONDON, Sept 20 (Reuters) - World shares rose on Friday as
stimulus measures by major central banks eased worries about
growth, especially in Asian markets, while oil headed for its
best week since January.
China cut a key lending rate for the second straight month
on Friday, becoming the third major central bank to cut interest
rates in recent days, after the European Central Bank and the
U.S. Federal Reserve. Equity markets have welcomed the central bank moves,
although most of the cuts was already priced in and worries
about a possible global slowdown still linger.
Renewed tensions in the Middle East, after an air attack
knocked out a Saudi Arabian oil supply hub last weekend, have
also unnerved investors. Oil prices were on track for a weekly
gain of 7.6%, their biggest weekly rise since the first week of
2019. The MSCI world equity index .MIWD00000PUS , which tracks
shares in 47 countries, gained 0.1%, on course for a fourth day
of slim gains but still heading for a weekly loss.
The index was bolstered by Europe's STOXX 600 .STOXX ,
which climbed 0.1% as investors bought defensive stocks, and a
0.6% gain for Asian equities outside Japan .MIAPJ0000PUS . Wall
Street futures gauges suggested gains of around 0.2% ESc1 .
U.S. economic data had eased worries about slowdown in the
world's largest economy. The number of Americans claiming
unemployment benefits rose less than expected and home resales
increased to a 17-month high in August. Some analysts were still cautious. Markets are waiting with
bated breath for signs of where the economy is heading, said
Michael Hewson, chief market analyst at CMC Markets.
"We are in a bit a sweet spot, with data starting to improve
a little, and central banks on the other side remaining just
about at the limit of what they can do," he said.
"But there are significant tail risks – for me, quite
simply, firms won't commit to large-scale investment decisions
when there's no clarity over business conditions," Hewson said.
Geopolitical risks range from the U.S.-China trade war to
Britain's efforts to leave the European Union next month. An
attack on Friday by a Saudi-led coalition in Yemen highlighted
tensions in the Middle East. WEEKLY LOSS FOR DOLLAR?
Investors were also braced for volatility on "quadruple
witching day" - the quarterly expiration of equity options and
futures. A spike in U.S. overnight lending rates also sparked
concerns of evaporating liquidity.
The rising rates, along with a quarter-point Fed rate cut,
curbed demand for dollars. So did decisions by the Bank of
England, the Bank of Japan and the Swiss National Bank to keep
rates unchanged this week.
The dollar slipped 0.1% against an index of other currencies
.DXY to 98.185, on track for its third straight weekly drop.
"Other central banks are not in easing mode as the Fed has
been this week ... dampening some of the safe-haven appeal of
the dollar," said Thu Lan Nguyen, a foreign exchange analyst at
Commerzbank.
Sterling GBP= reached a two-month high of $1.2566 against
the dollar after European Commission President Jean-Claude
Juncker said he thought Brussels could reach a deal with Britain
to leave the European Union. The pound was last up 0.3% at
$1.2560.
Brent crude LCOc1 was at $64.88 a barrel, up 48 cents or
0.8% at 0814 GMT.
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