GLOBAL MARKETS-Rebounding commodities aid stocks; dollar up

* MSCI world equity index up 0.2 percent at 331.40

* Rebound in oil and commodities helps European stocks

* Dollar rises towards 7-month peak

By Natsuko Waki

LONDON, Aug 20 (Reuters) - Oil and commodities rebounded on Wednesday, helping world stocks climb after hitting their lowest level in almost two years the previous day, while the dollar rose close to this week's seven-month high.

Rising resource stocks helped European shares defy Tuesday's fall on Wall Street, where fears over the future of top U.S. mortgage firms Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) and dismal housing data dragged financial firms lower.

Oil rose above $115 a barrel -- after sliding more than $30 from its July record peak -- while gold rose above last week's nine-month low, driven by strong demand.

"We have seen really heavy demand over the last two weeks on the physical side," said Michael Kempinski, senior trader at Commerzbank, referring to gold. "The bounce-back is on the back of this high physical demand."

U.S. light crude CLc1 rose 0.5 percent to $115.17 a barrel. Gold <XAU=> rose to $812.80 an ounce.