Global stocks gain as low oil prices feed ECB stimulus hopes

NEW YORK (Reuters) - U.S. and European stock prices rose on Wednesday on hopes the European Central Bank would embark on more stimulus soon to avert deflation in the euro zone, and oil prices showed no sign of rebounding soon from their lowest levels since 2009.

Crude oil prices have slid sharply since mid-2014, tipping monthly euro zone inflation into negative territory for the first time since 2009. The European statistics office estimated that prices were down 0.2 percent in December from a year earlier.

Investors grew more hopeful that the ECB might roll out a bond-buying program to prevent a downward price spiral. This helped knocked the euro to a nine-year low and bond yields in several euro zone members to record lows.

"We think they will deliver quantitative easing (bond buying) in the first quarter, and that will offer support to European stocks," said Robert Parkes, an HSBC strategist in London.

The FTSEurofirst 300 index of top European shares <.FTEU3> jumped as much as 1 percent after three losing sessions. It was up 0.4 percent at 1,328.46 points in late European trading.[.EU]

The rebound in European shares revived Wall Street. The Dow Jones industrial average <.DJI> was up 142.81 points, or 0.82 percent, to 17,514.45, the S&P 500 <.SPX> was up 17.82 points, or 0.89 percent, to 2,020.43 and the Nasdaq Composite <.IXIC> was up 42.85 points, or 0.93 percent, to 4,635.58. [.N]

Tokyo's Nikkei <.N225> ended flat at 16,885.33. [.T]

The MSCI world equity index <.MIWD00000PUS>, which tracks shares in 45 nations, rose 0.37 percent, to 405.54.

The ECB meets on Jan. 22 but may be reluctant to act aggressively before Greece's general election on Jan. 25. The country might move to exit the euro zone if the left-wing Syriza party wins.

The oil market remained depressed. Brent crude slid more than 2 percent early, dipping below $50 a barrel for the first time since early 2009 before bouncing up to just over $51. By midday in New York Brent and U.S. crude were up from the previous session but still far below last summer's highs. [O/R]

The euro fell as low as $1.18085 , the lowest since 2009. It last traded at $1.18150, down 0.6 percent on the day on the EBS trading system. [FRX/]

The dollar also rose against the yen, rebounding from early losses. It was last up 0.9 percent at 119.43 yen , which was about 2.4 yen below a seven-year peak set in December.

The greenback climbed on encouraging data on U.S. trade and private job growth and higher U.S. yields.

U.S. 10-year Treasury note yields edged up, briefly touching 2 percent, while 30-year yields were up 1 basis point at 2.532 percent , rebounding from an all-time trough of 2.443 percent hit on Tuesday. [US/]

Longer-term borrowing costs reached record lows in Germany, France, the Netherlands, Austria, Belgium, Finland as well as in Japan, Canada and Australia. [GVD/EUR]

Yields on German bonds of maturities of up to 5 years were negative and the 10-year yield touched as low as 0.433 percent.

(Additional reporting by Rodrigo Campos in New York; Jamie McGeever in London; Editing by Anna Willard, James Dalgleish and David Gregorio)

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