GLOBAL MARKETS-World shares jump; euro up on Portugal optimism

* MSCI world index reclaims level before Japan disasters

* Portugal bailout likely after PM resigns, yields soar

* Euro rises on optimism on EU summit

* Gold and silver hit record highs (Updates prices, changes quotes)

By Rodrigo Campos

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

Some investors, however, continued to seek out safety, driving gold to a record high of $1,447.40 an ounce, and silver to a 31-year peak at $38.13 on worries about the ongoing violence in the Middle East and fears that Portugal will, in fact, need a bailout

A downgrade of most Spanish banks' debt by rating agency Moody's and rising borrowing costs for Portugal had weighed on the euro earlier.

The fall of the Portuguese government following the resignation of its prime minister is expected to dominate a summit of EU leaders on Thursday and Friday, with Lisbon under intense pressure to seek a bailout package.[USD/]

"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."

Oil prices edged up 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. [ID:nLDE72N006]

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 volumes, however, have lately underscored caution.

"What I saw yesterday and today is a stabilization of the market," said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

"There have been a few good earnings report that have given investors a bit more confidence that earnings are likely to hold...so the story will continue that the rally has been built on strong earnings momentum," he said.

The Dow Jones industrial average <.DJI> added 80.26 points, or 0.66 percent, to 12,166.28. The Standard & Poor's 500 Index <.SPX> rose 9.90 points, or 0.76 percent, to 1,307.44. The Nasdaq Composite Index <.IXIC> gained 31.59 points, or 1.17 percent, to 2,729.89.

The S&P 500 consumer discretionary index <.GSPD> was up 1.2 percent.

The MSCI All-Country index <.MIWD00000PUS> climbed 0.9 percent, rising for six successive trading days for a gain of more than 4 percent.

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

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Surveys on Thursday showed economic recovery continued in March, shrugging off Japan's disaster, although the turmoil in the Middle East turmoil 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 it advised a cautious stance given signs of higher inflation and and an increased probability of policy tightening. [ID:nL3E7EO2HO].

"We are recommending that investors shift to a more cautious approach to markets than the risk-embracing positions we have recommended since the recovery got under way two years ago," said Larry Kantor, head of research at Barclays.
Reuters polls on world stock markets [ID:nLDE72K1HU] Q+A-What's next for Portugal? [ID:nLDE72N00Q] European sovereign debt crisis: http://r.reuters.com/hyb65p Japan earthquake in graphics http://r.reuters.com/fyh58r U.S. crude futures chart: http://link.reuters.com/maq68r

EU IN DISARRAY

The premium investors demand to hold Portuguese debt rather than benchmark German Bunds hit euro lifetime highs.

Prime Minister Jose Socrates resigned on Wednesday after parliament rejected his government's latest austerity measures aimed at avoiding a bailout.

The euro was up 0.8 percent against the dollar at $1.4196, after earlier falling to a low of $1.4053 on trading platform EBS.

The yen was steady against the dollar at 80.88 yen , although market players are still wary Japan may intervene to sell the currency if the dollar breaches 80 yen.

U.S. crude CLc1 rose above $106 per barrel and Brent LCOc1 edged up, still supported by concern over instability in Libya and the Middle East and by rising equity prices. [O/R]

A report a French fighter jet, part of a U.N. coalition enforcing a no-fly zone, had destroyed a Libyan war plane, raised more worries of a longer supply outage from the strife-torn North African nation. [ID:nN24125038] (Reporting and writing by Rodrigo Campos; Additional reporting by Tenzin Pema, Gene Ramos, Caroline Valetkevitch, Wanfeng Zhou; Editing by Leslie Adler)