GLOBAL MARKETS-World stocks stay near all-time high after Fed signals

* MSCI (NYSE: MSCI - news) world index strains for all-time high

* China HSBC flash PMI at 4-month high

* Yellen leads some to pare bets on immediate rate hike

* Gold rebounds from 7-week low plumbed in previous session

* European stocks ease back after gains on Greece deal

By Marc Jones

LONDON, Feb 25 (Reuters) - World stocks stayed within reach of an all-time high on Wednesday as investors welcomed comments from Federal Reserve Chair Janet Yellen suggesting that the U.S. central bank is in no rush raise interest rates.

Markets, still on a high after the euro zone agreed to extend Greece's aid deal, were also supported by slightly better than expected Chinese factory activity data.

But Wall Street was expected to see the S&P 500 and Dow ease off their latest record highs when trading resumes.

European bourses were also happy to take a breather after six days of unbroken gains and a surge since the start of the year that has seen the benchmark FTSEurofirst 300 race up roughly 17 percent.

Following Wall Street's gains on Tuesday and more rises in Asia overnight, however, MSCI's 46-country world index was up 0.1 percent at 433.29 points and straining for the 434.24 all-time peak it scaled in September.

"All the stars have been aligned recently, we have had the lower euro, the lower oil, and the lower cost of funding," said Didier Duret, chief investment officer at ABN Amro.

"For the rally to continue we now need two things. The recovery has to be driven by hard facts, the consumer and manufacturing. And we need the hope that the Fed won't be too aggressive with hiking rates, and yesterday we got that message."

Global stocks have been on a red-hot run as last year's slump in oil and energy prices added to the already massive stimulus provided by the world's major central banks via record low interest rates.

Fed chief Yellen bolstered the view that there would be little change in that. She (Munich: SOQ.MU - news) told Washington's Senate Banking Committee that the bank was preparing to consider rate hikes "on a meeting-by-meeting basis" but that it would provide markets with clearer signals before it moved.

That marked a subtle change in how the Fed speaks about its plans, suggesting that although a hike could still come as early as June, later is also possible in view of weak U.S. inflation and a sluggish global economy.

The dollar had dropped in the wake of Yellen's comments overnight and was just starting to halt the slide as the start of U.S. trading approached.

It had clawed its way back to 118.88 yen and was almost flat against the euro at $1.1350 although it was still struggling against sterling at $1.5481.

FRAGILE CHINA

Because Yellen gave no sign of an imminent rate increase, investors piled back into U.S. Treasuries, sending benchmark 10-year yields back below 2 percent and two-year yields to 2-1/2-week lows.

News on Tuesday that the euro zone had approved Greece's reform plan, a requirement for Athens to receive a four-month extension to its bailout, continued to help European bonds.

Germany saw investors effectively pay to lend it money for five years for the first time at a bond auction. Irish yields hovered at a new low of just 1 percent, although Greece saw its yields nudge up.

Aggressive action like the ECB's 1 trillion euro bond buying programme starting next month are squeezing almost all returns out of higher-rated bonds, making shares attractive to global investors.

In China, the world's second largest economy, the closely watched flash HSBC/Markit Purchasing Managers' Index inched above the line denoting growth in activity, beating the consensus forecast for a slight contraction due to risks from weak foreign demand and deepening deflationary pressures.

"We believe more policy easing is still warranted at the current stage to support growth," said Qu Hongbin, HSBC's chief economist in China.

MSCI's broadest index of Asia-Pacific shares outside Japan ended up 0.85 percent, but Japan's Nikkei snapped a five-day climb after hitting a 15-year high the previous day.

Weakening global growth has been keeping investors on edge about the Fed's plans, with some worrying that a premature start to a rate-hike cycle there could drain momentum from the U.S. economy even as Europe and China continue to struggle.

Among commodities, oil overcame pressure from expectations that U.S. crude inventories will rise again, garnering support from news of a shutdown of Libyan oilfields and comments from Saudi Arabia that it was seeing a pick-up in demand.

Brent added about 50 cents to $59.15 a barrel and U.S. crude crept up to $49.53. Gold added about 0.85 percent to $1,208.50 per ounce, inching off a seven-week low. (Editing by Alison Williams)