* MSCI world equity index up 0.5 pct at 330.31
* Euro off three-week low with focus on Greek vote
* Dollar down before Fed; oil rises
By Natsuko Waki
LONDON, June 21 (Reuters) - World stocks and the euro rose from last week's three-week lows on Tuesday as expectations that the euro zone will avoid a messy default of Greek sovereign debt attracted investors back into risky assets.
Investors are awaiting a parliamentary confidence vote for Greek Prime Minister George Papandreou, a step towards the passage of more spending cuts in exchange for foreign loans.
World stocks are down nearly 8 percent from their three-year high set in May as investors grew worried disorderly restructuring of Greek debt would cause ructions in the market and hit the region's banking sector.
"The market is likely to lack true conviction. The Greek situation continues to cast a very long shadow over the market. All eyes are going to be on the political vote in Greece to see where that leads us," said Keith Bowman, equity analyst at Hargreaves Lansdown.
"Certainly valuations are more attractive than they were. We have seen some selective bargain hunting here and there." MSCI world equity index <.MIWD00000PUS> was up half a percent on the day while the FTSEurofirst 300 index <.FTEU3> rose 0.5 percent.
Emerging stocks <.MSCIEF> rose 1 percent. Shanghai stocks
<.SSEC> -- which have been under pressure on concerns about more
credit tightening -- rose 1 percent to move away from the
previous day's 9-month low. U.S. stock futures
"From a valuation perspective, the equity market is very attractive. In a more normal environment, we would clearly be at a 'buy' level," said Marco Bruzzo, fund manager at Mirabaud Gestion Asset Management.
"But in the short term, the market is reined in by the sovereign debt crisis, the U.S. economic slowdown and China's inflation risks."
Bund futures
If the confidence vote is passed, the Greek parliament will vote on the austerity measures by June 28. Euro zone finance ministers gave debt-crippled Greece two weeks from Monday to approve further spending cuts and tax rises in return for another 12 billion euros in emergency loans. [ID:nLDE75I0FM]
Credit rating agency Fitch said on Tuesday it would regard both a Greek sovereign debt swap and a rollover of maturities, even a voluntary one, as a default. [ID:nL3E7HL050]
U.S. crude oil
The Federal Reserve starts its two-day meeting later on Tuesday. Since its last meeting in April, U.S. economic data has taken a decisively weak tone but the central bank has set the bar very high for any more monetary stimulus after its $600 billion bond buying programme that ends this month.
"The consensus remains that this is a temporary slowdown. (But) it might turn out some form of additional non-conventional programme may be needed," said Yves Bonzon, chief investment officer at Pictet Wealth Management.
(Additional reporting by Dominic Lau and Jeremy Gaunt; Editing by Anna Willard)