* British retailer M&S sees worst sales in decade

* Taiwan exports fall most on record

* World stocks extend rally to 10th straight session

* Indonesia cuts rates by bigger-than-expected 50 bps (For more on the crisis, click [nCRISIS])

By James Davey and Mark Potter

LONDON, Jan 7 (Reuters) - Britain's biggest clothing retailer reported its worst sales in a decade on Wednesday and Taiwan said its exports plunged the most on record, grim news belying recent optimism in world markets of a revival in the global economy.

Despite a stream of gloomy company news, investor appetite for riskier assets such as shares has improved on hopes a wide array of government stimulus packages and the cheap, ample supply of money from central banks will finally pay off later this year.

Reflecting the stronger risk appetite, MSCI's All Country World index .MIWD00000PUS rose 0.6 percent, up for the 10th straight session and heading for its longest winning streak in five years. [MKTS/GLOB]

"Obviously market sentiment is improving despite the fundamentals of the global economy remaining weak," said Karen Lin, a fund manager of Paradigm Asset Management in Taiwan.