*

Euro STOXX 600 up 0.7%

*

Investors lap up riskier assets again

*

Fed Chair Powell leaves door open to further easing

*

French stocks jump after LVMH earnings

*

Dollar slips

*

Gold crosses $4,200 for first time

*

US-China trade tensions continue to simmer

(Updates prices to reflect early European trading)

By Tom Wilson and Rae Wee

LONDON/SINGAPORE, Oct 15 (Reuters) - Global stocks

recovered some of their recent losses on Wednesday after

comments perceived as dovish by U.S. Federal Reserve Chair

Jerome Powell and a slate of positive bank earnings on Wall

Street, while the dollar lost ground.

European shares gained 0.7%, with French stocks

adding 2.4% as LVMH shares jumped 12% after

the world's largest luxury group reported upbeat earnings, in

turn boosting the wider sector.

Powell on Tuesday left the door open to further rate cuts

and said the end of the central bank's long-running effort to

shrink the size of its holdings may be coming into view.

Powell "struck a more dovish tone than expected," Deutsche

Bank analysts wrote. His comments on ending the shrinking of the

Fed balance sheet in the coming months "puts December on the map

in terms of a halt," they added.

His comments lifted markets and reinforced expectations of

more easing this year, with roughly 48 basis points worth of

U.S. rate cuts priced in by December.

In turn, the U.S. dollar dropped 0.3% against a

basket of peers, with the yen and the Australian dollar the

standout performers as both recovered from steep drops against

the dollar last week.

Wall Street futures were set for gains, with Nasdaq futures

up 0.5% and S&P 500 futures advancing 0.4%.

Solid earnings results from U.S. banking giants and an

upward revision of the International Monetary Fund's 2025 global

growth forecast also underpinned the market, which had taken a

nosedive earlier in the week on renewed signs of strain in

U.S.-China trade relations.

MARKET SENTIMENT REMAINS FRAGILE

Yet sentiment remained fragile.

Markets have been volatile in recent days, rocked by the

escalation in the U.S.-China trade war after Trump announced

additional 100% duties on Chinese goods in retaliation for

Beijing's dramatically expanded export controls on rare earths.

U.S. President Donald Trump said on Tuesday that Washington

was considering terminating some trade ties with China, while

the U.S. and China also began charging additional port fees on

ocean shipping firms.

"It does suggest that a lasting truce is not going to be

easy to achieve. But it's also a reminder as well, that the

market does need to be mindful that... they shoot these arrows

and then they sort of walk them back," said Tony Sycamore, a

market analyst at IG.

In China, deflationary pressures persisted, data showed,

with both consumer and producer prices falling in September.

MSCI's broadest index of Asia-Pacific shares outside Japan

rose 2.1%, with Hong Kong stocks adding

2%.

FRENCH BONDS RALLY AFTER MORE POLITICAL GRIDLOCK AVOIDED

In France, Prime Minister Sebastien Lecornu promised on

Tuesday to suspend a landmark pension reform until after the

2027 election, avoiding more political gridlock in the EU's

second-biggest economy and providing some relief to investors.

French bonds rallied for a second day, pushing yields to

their lowest in two months. Ten-year yields fell to

3.37%, the lowest since August 15, and were heading for the

largest weekly decline since May.

"I think anything that will bring some relief to the

back-and-forth within the French parliament is an absolute win,"

said Juan Perez, director of trading at Monex USA.

The euro was last 0.2% higher at $1.163. The single

currency has largely been insulated from France's political

turmoil.

Elsewhere, spot gold broke through $4,200 an ounce

for the first time, extending its record-breaking run, as it was

helped by geopolitical and economic uncertainties and the U.S.

rate cut expectations.

Oil prices slipped, with Brent crude futures down

0.2% to $62.27 a barrel, while U.S. crude eased 0.1% to

$58.63 per barrel.