Firmer Asian, British and emerging market shares pushed world stocks to a one-month high on Thursday with the focus on the fate of U.S. automakers, while doubts over deep euro zone interest rate cuts boosted the euro.

Oil rose 5 percent, extending earlier gains, while the index of leading European shares fell. U.S. stock futures were pointing to a firmer open on Wall Street with investors focusing on the $14 billion plan to bail out the big three U.S. automakers.

The proposal passed the House of Representatives but its prospects looked grim in the Senate where supporters, who say the measure is necessary to avoid another jolt to an already contracting economy, struggled to keep it alive.

“Most of the bad news is already in the market. It is going to get worse? Sure. The economic news is going to get awful worse,” said Peter Dixon, UK economist at Commerzbank.

“But the market will only react if the numbers continue to get worse.”

MSCI world equity index rose 0.7 percent. Asia rose 0.7 percent and Britain gained 0.3 percent. Emerging stocks  rose more than 1 percent. The FTSEurofirst 300 index of leading European shares was down 0.7 percent. U.S. stock futures were up around 0.1 percent on the day .

The euro rose 1.5 percent to a six-week high of $1.3222 after European Central Bank Executive Board member Juergen Stark said the central bank does not have a lot of room for manoeuvre after its interest rate cut last week. Stark also said further rate reductions could be done only in small steps.

The region’s interest rate futures are now showing that the euro zone cost of borrowing to bottom out at 1.75 percent, from just over 1.5 percent after the ECB’s move last week to cut rates to 2.5 percent.

“If the euro zone is being perceived to still have rates at substantially higher levels then obviously there’s a positive rate spread,” Rabobank markets strategist Jeremy Stretch said.

“But I’m not convinced that its ultimately going to be positive as the dynamics of the euro zone economy are pretty weak.”

The Swiss franc cut earlier gains to trade at 1.1927 per dollar after the Swiss National Bank cut interest rates by 50 basis points. Switzerland, Canada and Korea joined a growing number of central banks worldwide in cutting interest rates over the past 24 hours.

The dollar fell 1.3 percent against a basket of major currencies. The December Bund futures fell 18 ticks.

U.S. crude oil was up 5 percent at $45.70 a barrel, helped by favourable demand forecast by the International Energy Agency and signs that top oil exporter Saudi Arabia has slashed January supplies ahead of next week’s OPEC meeting have underpinned prices.

Natsuko Waki

LONDON, Dec 11 (Reuters)