* Oil climbs with equities, Libya output drop
* Sterling near 20-month lows after Brexit vote delayed (Updates with close of European markets)
By Chuck Mikolajczak
NEW YORK, Dec 11 (Reuters) - A gauge of global stock markets rose in volatile trade on Tuesday following threats by U.S. President Donald Trump to shut down the government over a funding fight, though stocks in Europe advanced on signs of a thaw in the U.S.-China trade battle.
European shares closed higher, in part from a boost in auto shares, and Wall Street clawed higher after a report that China is moving to cut import tariffs on American-made cars, which market participants viewed as a sign China is ready to make concessions on trade. report came after Chinese Vice Premier Liu He exchanged views on the next stage of trade talks with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer. U.S. stocks wobbled after the open and fell further after Trump openly sparred about government funding with the top two Democratic lawmakers during an Oval Office meeting, raising doubts a deal would be possible ahead of a deadline later this month. are a lot of people who think gridlock is a good thing because you don't get anything done, but I think gridlock is not a good thing," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
"I guess the upshot of the bickering suggests to me that a government shutdown is not out the cards by any means and that's probably the most negative thing to come out of it," Tuz said.
Wall Street later turned higher.
The Dow Jones Industrial Average .DJI rose 58.76 points, or 0.24 percent, to 24,482.02, the S&P 500 .SPX gained 9.81 points, or 0.37 percent, to 2,647.53 and the Nasdaq Composite .IXIC added 33.29 points, or 0.47 percent, to 7,053.81.
Germany's DAX .GDAXI , which entered bear market territory last week and is Europe's most China-sensitive market, climbed 1.5 percent.
The pan-European STOXX 600 index .STOXX rose 1.53 percent, and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.35 percent, on track for a sixth straght decline.
The uncertainty over Britain's exit from the European Union, or Brexit, continued to haunt investors and held sterling near 20-month lows after British Prime Minister Theresa May postponed a vote on her deal. On Tuesday, German leader Angela Merkel ruled out further Brexit negotiations but said efforts were being made to give Britain reassurances. spokesman for May said Britain's parliament will vote on whether to approve her Brexit deal before Jan. 21. GBP= was last trading at $1.2527, down 0.25 percent after hitting a low of 1.249.
After an initial softening, the dollar index .DXY , which tracks the U.S. currency against six major peers, rose 0.22 percent, with the euro EUR= down 0.33 percent to $1.1318. bond markets were focused on France a day after President Emmanuel Macron announced wage rises for the poorest workers and tax cuts for pensioners, in further government concessions aimed at defusing weeks of often-violent protests, raising concerns over fiscal spending.
In response, French bond yields rose to their highest spread in 20 months over Germany's yields DE10FR10=RR , at 47.81 basis points. 10-year Treasury notes US10YT=RR last fell 7/32 in price to yield 2.879 percent, from 2.856 percent late on Monday.
Oil prices rebounded after having sunk on Monday, buoyed by an outage that dented Libyan production. crude CLcv1 rose 1.27 percent to $51.65 per barrel, and Brent LCOcv1 was last at $60.20, up 0.38 percent.
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http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar
http://tmsnrt.rs/2egbfVh MSCI All Country Wolrd Index Market Cap
http://tmsnrt.rs/2EmTD6j
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