* Stocks up across the board, reversing Tuesday's falls
* Treasury yields stay elevated after Powell comments
* Oil rebounds 4%; yen takes a dive as risk appetite returns
* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
By Tommy Wilkes
LONDON, Dec 1 (Reuters) - Stock markets roared higher on Wednesday, reversing much of the previous session's losses, as investors used the dip in prices to bet the latest COVID-19 variant would not derail the economic recovery.
The EUROSTOXX rose 1.1% in early trading while Britain's FTSE 100 rallied 1.3% and Germany's DAX 0.75%. Wall Street futures pointed to a strong open .
MSCI's gauge of stocks across the globe was up 0.42% by 0900 GMT on Wednesday, having shed 1.5% the previous day, when investors took fright at a warning from drugmaker Moderna that existing vaccines are unlikely to be as effective against the Omicron variant.
In Asia, stocks rose 1.1% as traders reversed course after a sharp selloff the day before took the regional benchmark to a 12-month low.
"We expect market focus to gradually shift away from Omicron and toward positive growth and earnings trajectory, allowing equities to resume their upward course, and for some of the cyclical markets particularly negatively affected by recent developments, including Japan, the Eurozone, energy, and financials, to outperform," said Mark Haefele, chief investment officer at UBS Global Wealth Management.
Oil also rebounded after steep falls in the previous session, ahead of a meeting by the Organization of the Petroleum Exporting Countries (OPEC).
U.S. West Texas Intermediate (WTI) crude futures rose 3.88%, to $68.75 a barrel. Brent crude futures gained 4.17%, to $72.12 a barrel.
Global markets had also come under selling pressure on Tuesday after Federal Reserve Chair Jerome Powell said asset purchases may need to be tapered faster to fight rising inflation.
"At present the market focus has been on Omicron and the potential that can disrupt the world, but the real focus should be on the Fed and the rate policy. That's the biggest shock to come out of the last day or so," said Kerry Craig, global market strategist at JPMorgan Asset Management.
Powell's comments had pushed U.S. Treasury yields higher, especially at the short end of the curve.
The yield on two-year notes, which reflects short-term interest rate expectations, rose to as high as 0.622% on Wednesday, up from as low as 0.4410% on Tuesday, when traders were speculating the new variant could lead to a more dovish Fed.
Benchmark 10-year notes also sold off, last yielding 1.5022%, up from Tuesday's two-and-a-half month low of 1.4443%.
Rising yields caused the dollar to steady against most peers and gain ground on the Japanese currency. Versus the yen it rallied 0.4% to 113.57 yen, with the safe haven yen hurt by the risk friendlier mood.
That sentiment also helped the Aussie dollar which rose 0.6% from Tuesday's 32-month low.
Risk sensitive emerging market stocks and currencies also rebounded.
Gold, despite all the excitement, saw little safe haven demand with the spot price at $1,779 an ounce, up 0.3%.
(Additional reporting by Alun John in Hong Kong; Editing by Simon Cameron-Moore)