World stock markets sprinted ahead yesterday, driven higher by reports of brighter global growth prospects and as investors hunted for bargains a day after heavy losses brought on by European debt fears.

The positive mood on equities markets however did not extend to the besieged euro, which fell to $1.2216 in late-day trade from $1.2337 on Tuesday on persistent jitters regarding the fate of European public finances and banking sector.

"Fears that the European banking sector is sitting on bad debts will be sufficient for the market to remain nervous and for the euro to remain under pressure medium-term," said analyst Jane Foley of Forex.com.

Stock market players in Europe and the US took heart from the latest projection by the OECD that worldwide economic momentum would hit 4.6 per cent this year after a contraction of 0.9 per cent in 2009.

In its previous forecast in November last year, the OECD predicted growth in the global economy limited to 3.4 per cent in 2010. The recovery is widely attributed to massive stimulus spending by governments and central banks to confront the 2008-2009 recession, as well as intervention by the International Monetary Fund.

"Participants are allowing themselves to go with the flow of reassuring headlines, like the OECD raising its global growth forecast for 2010 and 2011, instead of being consumed by all things negative," said Briefing.com analyst Patrick O'Hare.

After a spurt on Asian exchanges in response to bargain hunting, European equities took flight.