European shares pushed higher on Wednesday, tracking gains in most Asian equity markets, as news of strong Chinese exports sparked a tentative return of risk appetite while the euro stabilized on options demand.

Oil prices rose 1 percent after Reuters reported that China's exports grew 50 percent in May from a year earlier, well above expectations for a 32 percent rise, in a sign that the economy of the world's second-largest oil user was roaring ahead. The official data is scheduled to be reported on Thursday.

The pan-European FTSEurofirst 300 <.FTEU3> rose 0.7 percent by 0810 GMT, halting three sessions of falls though gains were tempered by lingering worries that the euro zone debt crisis could erode economic growth.

After three days down you get some relief and markets pause but the well known problems around the debt crisis are still there and there's no relief from that, said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.

Markets want to see where the end-game for this crisis is and the implication for the European banking system. They want to see policy action that's more final and definitive than we've seen so far, he said.

The gains in European equity markets and most Asian shares propped up the MSCI's all-country world stock index <.MIWD00000PUS> to trade 0.2 percent higher.

Japan's Nikkei <.N225> pulled off its lows but still ended down 1 percent at a six-month closing low as investors worried about whether Europe can resolve its deficit problems. <.T>

ECB POLICY MOVES AWAITED

Options demand helped the euro hold steady against the dollar around $1.1955 after initially rising to $1.1968 earlier after the Chinese exports report. But it remained near four-year lows and analysts said the outlook for the single currency remains grim.

Sovereign bond yield spreads of countries such as Spain and Portugal over German benchmarks stayed high, and European banks' overnight deposits with the European Central Bank hit a record, highlighting jitters over the health of the financial system.

Sovereign spreads are widening and banks are depositing record amounts with the ECB. There's no relief bounce for the euro and still big animosity toward the single currency, said Kenneth Broux, market economist at Lloyds Banking Group.

Markets were also unsettled by conflicting signals from top U.S. Federal Reserve officials on Tuesday on the direction of interest rates, highlighting a split within the central bank as the U.S. economy shows signs of slowing.

Investors were also awaiting a European Central Bank meeting on Thursday to see if it will announce fresh steps to ease strains from the euro zone's debt crisis.

The ECB is also expected to publish a new set of economic forecasts for the region which are likely to signal somewhat stronger activity, despite worries that debt problems and government austerity measures will sharply brake growth.

There are some who believe that the ECB may go as far as to lower interest rates, although this view is not widely held, said a trader for a Japanese trust bank.

Risk-averse investors have streamed into gold, sending prices for the precious metal to a record dollar high, on persistent fears that the euro zone debt problems will spread.

Markets hate uncertainty and at the moment you've got a lot of it, said Peter Wright, a dealer at Burrell & Co in Australia.

U.S. stocks rose up to 1.3 percent in volatile trade overnight, but investors shied away from larger companies which have significant exposure to Europe. <.N>

(Additional reporting by Sugita Katyal in Singapore, Neal Armstrong and Harpreet Bhal in London)

(Editing by Jason Webb)

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