* Oil ends lower
* Chilean peso drops after protests
* Benchmark 10-year yields up (Adds U.S. markets' closing levels)
By Caroline Valetkevitch
NEW YORK, Oct 21 (Reuters) - World stock indexes rose on Monday as signs of work to resolve the U.S.-China trade war bolstered investor hopes, while the Canadian dollar strengthened in the hours before results of the election for prime minister.
U.S. President Donald Trump praised efforts to end the U.S.-China dispute, while White House adviser Larry Kudlow said tariffs scheduled for December could be withdrawn if talks go well.
In Britain, the parliament's speaker refused to allow a vote on Boris Johnson's divorce deal with the European Union, suggesting the British prime minister faces further problems in Brexit ratification.
Johnson's opponents in parliament on Saturday demanded a change to the sequencing of the ratification of the deal, forcing him to request a delay.
MSCI's world equity index, which tracks shares in 47 countries, gained 0.6%. The Euro STOXX 600 added 0.6%, while the S&P 500 index ended up 0.7%.
"Trade news on the whole seems positive," said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
"Political news is so overwhelming, in a way, that I think investors are beginning to tune it out."
On Friday, Chinese Vice Premier Liu He said that Beijing will collaborate with the United States to address mutual concerns on the trade war.
Stocks investors are also gearing up for more high-profile earnings reports this week from such companies as Microsoft Corp .
On Wall Street, the Dow Jones Industrial Average rose 57.44 points, or 0.21%, to 26,827.64, the S&P 500 gained 20.52 points, or 0.69%, to 3,006.72 and the Nasdaq Composite added 73.44 points, or 0.91%, to 8,162.99.
The U.S. dollar recovered earlier losses as Brexit negotiations were once again thrown into disarray. Against the dollar, sterling was last down 0.02% to $1.297 having earlier broken above $1.30 for the first time in 5-1/2 months.
The Canadian dollar was last 0.31% stronger against the U.S. dollar. The election will determine if Trudeau will remain in power after two major scandals.
The Chilean peso was down more than 2% in its biggest daily percentage decline in more than six years after a state of emergency was declared in the capital city of Santiago following violent protests over the weekend.
In the U.S. bond market, yields rose as investors sold safe-haven debt on optimism about the potential U.S.-China trade deal.
In afternoon trading, U.S. 10-year note yields rose to 1.794% from 1.75% late on Friday.
In commodities, oil prices fell. U.S. crude fell 0.9% to settle at $53.31 per barrel and Brent settled at $58.96, down 0.8% on the day.
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Reporting by Caroline Valetkevitch in New York Additional reporting by Tom Wilson in London Editing by Sonya Hepinstall and Matthew Lewis