* China's producer prices beat expectations
* Oil jumps as fighting escalates in Kirkuk
* Japan's Nikkei tops two-decade record
* Euro falters; copper hits three-year high (Recasts lead; adds analyst comment; updates prices; adds Spanish stocks)
By Hilary Russ
NEW YORK, Oct 16 (Reuters) - World stocks rose on Monday and copper touched a three-year high as upbeat Chinese data drove optimism about the world's second biggest economy, while oil prices jumped as an escalation in fighting between the Iraqi government and Kurdish forces threatened supply.
Asian shares rallied to a decade high after figures showed China's producer prices beat market expectations to rise 6.9 percent in September from a year earlier. Street indexes rose as U.S. banking stocks recovered after slipping last week and technology stocks rallied, driven by a 1.6 percent increase in Apple Inc AAPL.O . Street's rise comes ahead of a barrage of quarterly earnings reports this week.
"The market is going higher despite all the news flow of geopolitical events," said Jeff Zipper, managing director at U.S. Bank Private Client Reserve in Palm Beach, Florida. "There is optimism on earnings, economic indicators and hopes of budget resolution."
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed up 0.57 percent at its highest level since late 2007.
Japan's Nikkei .N225 climbed 0.47 percent to a level not seen since November 1996. Australian shares .AXJO extended their winning streak to a fourth straight session, rising 0.6 percent, while South Korea's stock index .KS11 set a record.
The upbeat data from China came before the Communist Party Congress on Wednesday and third-quarter economic data on Thursday.
"What has helped risk appetite this morning is that the Chinese inflation data suggests the world's second biggest economy is doing much better than people expected this time a year ago for 2017," said Michael Hewson, chief markets analyst at CMC Markets.
The Dow Jones Industrial Average .DJI rose 60.57 points, or 0.26 percent, to 22,932.29, the S&P 500 .SPX gained 2.75 points, or 0.11 percent, to 2,555.92, and the Nasdaq Composite .IXIC added 10.32 points, or 0.16 percent, to 6,616.13.
The pan-European FTSEurofirst 300 index .FTEU3 closed up 0.04 percent, and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.08 percent. Emerging market stocks rose 0.51 percent.
Copper CMCU3 jumped 3.7 percent to $7,134 per tonne on the London Metal Exchange, after touching the July 2014 high of $7,177 a tonne, driven by economic data from China, the world's top copper consumer.
Prices are up about 29 percent year to date, on track for the biggest annual gain since 2010. of iron ore DCIOcv1 and coke DCJcv1 , key ingredients in steel-making, jumped with Dalian iron ore futures. MET/L
Oil prices rose as Iraqi forces entered the oil-rich city of Kirkuk, taking territory from Kurdish fighters and briefly cutting some output from OPEC's second-biggest producer. crude oil futures CLcv1 settled at $51.87 per barrel, up 42 cents or 0.82 percent, while Brent LCOcv1 settled at $57.82, up 1.2 percent on the day.
The euro weakened after the Austrian election put conservative Sebastian Kurz on track to become the next leader. He is seen as likely to seek a coalition with the resurgent far right because his party is far short of a majority. euro EUR= slumped 0.2 percent to $1.1798, while the dollar index .DXY rose 0.16 percent as investors repositioned following disappointing inflation data on Friday that sent the greenback lower. stocks lagged Europe after Catalan leader Carles Puigdemont failed to clarify whether he had declared independence from Spain last week, possibly paving the way for the central government to take control of the wealthy region. country index IBEX .IBEX fell 0.75 percent.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
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http://reut.rs/2kWi1mP GRAPHIC-World FX rates in 2017
http://tmsnrt.rs/2egbfVh GRAPHIC-Global assets in 2017
http://tmsnrt.rs/2yaWht3 GRAPHIC-Global market cap
http://reut.rs/2mcp7T1 GRAPHIC-Emerging markets in 2017
http://tmsnrt.rs/2ihRugV GRAPHIC-MSCI Indexes Price Performance YTD
http://reut.rs/2jiGv8R
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