(Recasts, updates prices) * Investors bet flight to safety overdone * European shares up 0.2%, U.S. eyes positive open * Treasury, Bund yields rise as calm prevails * Global currencies vs. dollar tmsnrt.rs/2PmYOcE LONDON, July 21 (Reuters) - Stocks and oil rose while bond yields eased on Wednesday as risk appetite returned, despite fears about rising cases of the Delta coronavirus variant worldwide and lingering concerns over inflation that had prompted an earlier flight to safety. With a key European Central Bank meeting on Thursday expected to strike a dovish tone and provide a further boost, the benchmark STOXX index of the region’s 600 largest shares rose 0.2% and U.S. stocks looked positive with S&P 500 futures up 0.49%. Stocks could receive a further uplift later Wednesday if U.S. President Joe Biden’s $1.2 trillion bipartisan infrastructure bill can navigate a planned procedural vote despite Republican appeals for delay. Having fallen to a five month lows of -0.44% on Tuesday, Germany’s 10-year Bund yield traded 2 basis points higher on Wednesday at -0.40% as a sense of calm crept back into European markets. “The moves had gone too far,” said Jan von Gerich, chief analyst at Nordea. “Markets have a tendency of doing that, but it’s dangerous to say it’s over for now until we see more of a stabilisation”. The dollar index turned negative on the day by 1400 GMT at 92.916 after touching 93.194, its highest since April, in early trading as the U.S. currency beat out gold as the safe haven asset of choice. Sterling meanwhile shrugged off Britain’s demand for a new deal from the European Union to govern post-Brexit trade with Northern Ireland, climbing 0.38% to $1.3678. A slew of upbeat updates from European blue-chip firms strengthened the positive mood in stock markets, with travel and leisure stocks rallying 4% after getting hammered recently by worries about a resurgence in coronavirus cases. As well as looking past those rising cases, investors seemed to ease on concerns that data last week showing a surge in U.S. consumer prices in June could prompt the Federal Reserve to bring a quicker end to emergency stimulus measures. That earlier flight to safe havens had pushed U.S. 10-year yield down < US10YT=RR> more than 20 basis points in the space of a week, but they edged up on Wednesday to 1.2817%. Gold likewise lost some of its recent safe haven lustre on Wednesday, with spot prices falling 0.4% by 1400 GMT as investors preferred the dollar. RISING INFECTIONS The more positive mood in European shares on Wednesday contrasted with a 0.02% dip in MSCI’s broadest index of Asia-Pacific shares outside Japan, as South Korea reported a daily record of new infections. Seoul’s KOSPI slid 0.52% and Hong Kong’s Hang Seng index fell 0.4%. “While some of the world is shrugging off rising infections as vaccination rates limit the severity of any symptoms of new cases, there are few parts of the world that can totally ignore this,” said Rob Carnell, Asia-Pacific chief economist at ING. Oil prices rose more than 3% as improved risk appetite provided support despite data showing an unexpected rise in U.S. crude inventories last week and a weaker demand outlook due to rising COVID-19 infections. Brent crude futures had gained $2.13, or 3.1%, to $71.48 a barrel by 1403 GMT. U.S. West Texas Intermediate crude futures rose by $2.27, or 3.4%, to $69.47 a barrel. Reporting by Lawrence White and Andrew Galbraith, additional reporting by Dhara Ranasinghe; Editing by Christopher Cushing, Kim Coghill, Catherine Evans, Timothy Heritage and Tomasz Janowski For Reuters Live Markets blog on European and UK stock markets, please click on: