* MSCI world equity index up 0.3 pct at 261.41
* China central bank reaffirms loose monetary policy
* Commodities firmer; U.S. dollar, Treasury prices down
By Dominic Lau
LONDON, July 30 (Reuters) - World stocks and commodity
prices rose on Thursday after China's central bank reaffirmed
loose monetary policy and European corporate earnings cheered
investors, while the dollar and government bond prices fell.
The People's Bank of China pledged to maintain loose
monetary policy and use market tools, not quota-style controls,
to ensure sustainable credit growth that will support economic
recovery. []
Worries that Beijing might be prepared to tighten lending
had spooked investors and weighed on commodity prices and
equities, as the country's loose monetary policy had helped
revive global growth.
Mostly positive corporate earnings also helped buoy market
sentiment. British telecoms group BT <BT.L> posted a
better-than-expected 3 percent fall in first-quarter adjusted
core earnings and France Telecom <FTE.PA> also reported
higher-than-expected first-half operating income.
"The earnings season gives the market a nice tailwind.
Investors should not become careless, but we are far from the
end of the world," said Roger Peeters, strategist at Close
Brothers Seydler in Frankfurt.
"Most figures are affected by the economic crisis but not
worse than recently expected."
Global equities were in demand, with the MSCI world equity
index <.MIWD00000PUS> advancing 0.3 percent after two days of
loss.
In Europe, the FTSEurofirst 300 index <> rose 0.6
percent, while Japan Nikkei average <> put on 0.5 percent,
hitting its highest close in nine months, and Chinese stocks
<> gained 1.7 percent after a 5-percent sell-off on
Wednesday.
BT shares soared nearly 12 percent and those for France
Telecom gained 3.2 percent.
According to Thomson Reuters data, the second-quarter
blended earnings growth rate for DJ STOXX 600 <> improved
to -40.4 percent on Wednesday close from -43.9 percent a week
ago. So far 95 companies have reported, of which 50 beat
estimates, two matched and 43 missed, the data showed.
On the economic front, German unemployment fell by 6,000 on
the month in seasonally adjusted terms in July.
COMMODITIES UP, DOLLAR DOWN
Metal prices rose, with copper <MCU3> regaining some ground
following a sell-off in the previous session.
Crude prices <CLc1> traded higher at above $63 a barrel
after sliding almost 6 percent the day before on data showing a
jump in U.S. crude stocks.
The dollar fell 0.1 percent against the yen <JPY=>, while
the euro <EUR=> rose 0.2 percent at $1.4054.
"I personally feel that the market will see further
corrective moves before more clues emerge on how the economy
will fare after this summer, with the dollar broadly rising and
commodities fall," said Kosuke Hanao, head of treasury product
sales for HSBC in Tokyo.
Yields on the benchmark 10-year U.S. Treasury <US10YT=RR>
rose 3 basis points at 3.696 percent as investors stayed
cautious ahead of a seven-year debt sale, after a second poor
auction this week heightened supply concerns.
The 10-year euro zone benchmark <EU10YT=RR> bund yield was
up 2 basis points at 3.453 percent.
(Additional reporting by Christoph Steitz in Frankfurt, and
Charlotte Cooper and Satomi Noguchi in Tokyo; Editing by
Victoria Main)
