* Euro under pressure after ECB comments
* Markets focus on reaction to east Ukraine referendum
* China shares up on capital market reform hopes
* Mumbai shares up ahead of elections
* Nickel, Oil rises on Ukraine concerns
LONDON, May 12 (Reuters) - Fresh talk of looser policy from the European Central Bank kept the euro and euro zone bond yields pinned down on Monday and helped the region's shares rise to a six-year high. Caution about unrest in eastern Ukraine, where rebels declared victory in a referendum on self-rule, had all but evaporated as U.S. trading neared. Wall Street was on track for early gains of 0.3-0.4 percent. Hopes of capital-market reform boosted Chinese shares. Indian shares reached record highs on expectations a more business-friendly coalition would win a general election now underway. European stocks got the week off to solid start as mining firms rallied after an upgrade from JPMorgan and investors moved into position for what is expected to be fresh stimulus from the ECB next month. One of the central bank's most vocal policymakers, Ewald Nowotny, said on Monday he favoured a "package" of easing measures, rather than just another thin slice off the bloc's near-zero interest rates. The pan-European FTSEurofirst 300 index of top shares had climbed 0.5 percent by 1245 GMT, as a gain of nearly 1 percent by Germany's DAX and 0.4 percent on Britain's FTSE compensated for a near-flat day in France. In the currency market, Nowotny's comments held the euro near to a one-month low at $1.3760, al though it looked to have found a foothold after Mario Draghi sent it spinning last week with a strong hint at a rate cut. It has shed roughly 1.7 percent since then, after reaching a 2 1/2-year high of $1.3995. "At least Draghi got things going somehow last week. We've had the kneejerk move; now we need to see if it will go further," said a dealer with one bank in London. "I think the euro will trade heavy for the next week or two, but as we get closer to the ECB's June meeting there will then be the uncertainty of will they, won't they."
UKRAINE STRAINS U.S. stock index futures rose on Monday, putting the S&P 500 within striking distance of record levels, though geopolitical concerns in the Ukraine could cap gains. Pro-Moscow rebels organisers of a weekend referendum in Ukraine said nearly 90 percent had voted in favour of self-rule, possibly opening the way for the region to break away from Kiev in a conflict increasingly out of control. Western leaders have threatened more sanctions in the key areas of energy, financial services and engineering if Moscow disrupts a presidential election planned in Ukraine on May 25. EU foreign ministers meet in Brussels later. Sources have told Reuters there is agreement to add about 15 people and five Crimean-based companies to the bloc's list of targets. Concerns of more violence pushed up oil prices, with U.S. crude futures rising above $100 per barrel, though a recovery by Russian shares after a poor start underscored investors' relatively sanguine attitude to the situation. ""Generally it looks like risk sentiment is still relatively benign," said Thu Lan Nguyen, emerging market currency strategist at Commerzbank in Frankfurt. "The markets are not pricing in a worst kind of (Ukraine) scenario. China is helping in that the situation has not got worse."
NICKEL SHINES U.S. Treasury prices dipped slightly on Monday, lifting the benchmark 10-year yield to 2.649 percent, compared with 2.623 percent at the end of last week. German Bund yields inched up to 1.46 percent. The yen also weakened slightly, with the dollar trading at 101.90 yen, having found support around 101.40 last week. In Asian trading, MSCI's broadest index of Asia-Pacific shares outside Japan had climbed 0.6 percent. India's benchmark index rose as much as 1.8 percent and the rupee also hit nine-month high on hopes an election victory for a BJP-led coalition could help rebuild investor confidence in Asia's third-biggest economy.
Among commodities, the tensions in Ukraine took safe-haven gold above $1,290 an ounce and lifted nickel -produced on a major scale in Russia- 5 percent, bringing its gains for the year to almost 50 percent. "People are trying to work out where they're going to get supply of nickel ore. There's a perception that over the next six-12 months, there will be a substantial deficit," said Nic Brown, head of commodities research at Natixis.
(Additional reporting by Maytaal Angel and Patrick Graham in London; Editing by Larry King)