World stocks hit a two-week high on Thursday as optimism from strong U.S. and Chinese manufacturing data extended into a second day while the euro gained, drawing support from solid French and Spanish bond auctions.

Asianb stocks also hit a two-week high and Wall Street was set for a slightly firmer open. U.S. stocks posted their best day in eight weeks on Wednesday, led by economically sensitive sectors like industrials and basic metals after the upbeat manufacturing surveys from the world's two largest economies.

Investors are largely staying on the sidelines however, ahead of a 1:30 BST news conference from European Central Bank President Jean-Claude Trichet. The ECB is tipped to keep its liquidity safety-net for banks in place after leaving interest rates unchanged as expected.

Low volumes and the fact that people are satisfied that in isolation equities represent some value (are keeping the bears at bay), David Buik, senior partner at BGC Partners said. The MSCI world equity index rose a quarter percent to its two-week high. The Thomson Reuters global stock index rose 0.3 percent.

The FTSEurofirst 300 index was down 0.1 percent, with investors remaining cautious ahead of Trichet's conference and Friday's closely-watched U.S. jobs report. Emerging stocks

added 0.5 percent.

You're getting a lot of quick, knee-jerk reactions in both directions. These disparate pieces of economic data are being reacted to but the information is by no means clear, said Angus Gluskie, portfolio manager at White Funds Management in Australia.

We've got the potential for markets to pick up strongly into the end of the year, but we may well have to go through a few nervous weeks in September first.

U.S. crude oil erased early gains to stand down 0.8 percent at $73.30 a barrel.

The bund future fell 36 ticks, while the euro was up 0.2 percent at $1.2825.

France and Spain sold 12.2 billion euros of bonds, with the average yield on the 5-year Bono dropping at auction and the paper easily absorbed as the yield fell after the tender.

The yen rose 0.4 percent to 84.10 per dollar, off its 15-year high of 83.58 hit last week.

The dollar lost 0.2 percent against a basket of major currencies.

(Additional reporting by David Brett; Editing by John Stonestreet)

Australia