* Stocks up, dollar slips
* Investors await G20, more earnings reports
* China data lifts mood
* Wall Street set for gains
By Jeremy Gaunt, European Investment Correspondent
LONDON, Oct 21 (Reuters) - World stocks ticked higher and
the dollar slipped on Thursday against a backdrop of nerves
about political currency machinations as well as caution about
corporate earnings.
Wall Street looked set to open higher.
Some fears about China's recent rate hike ebbed after a
batch of data showing a slowdown in economic growth, albeit to a
still healthy level, was taken as a sign that there may not be a
spate of future tightenings. []
Investor focus was on the Friday and Saturday meeting of
Group of 20 finance and central bank chiefs in South Korea. It
is expected to try to reach agreement on a common path to manage
currency, trade and macroeconomic imbalances.
Effective dollar devaluation stemming from an expected
renewal of a quantitative easing, or asset-buying, programme by
the U.S. Federal Reserve has spread tension across markets over
a potential currency war, with Washington pushing China to
revalue its yuan.
The accompanying volatility was on display on Thursday when
The Wall Street Journal quoted U.S. Treasury Secretary Timothy
Geithner as saying major currencies were roughly in alignment.
He also said he would use the G20 meeting to advance efforts
to rebalance the world economy and move toward norms on currency
policy.
This initially lifted the dollar broadly. But it soon fell
back as investors calculated reaction to the report had been
overdone.
The dollar was later down 0.4 percent against a basket of
major currencies <.DXY>. It was closing in on 15-year lows
against the yen <JPY=> and the euro was up a half a percent
above $1.40 <EUR=>.
"Since it is clear that the direction is toward an expansion
of quantitative easing (in the United States), it is hard to
expect a sustained rebound in the dollar," said Taisuke Tanaka,
FX strategist at Nomura Securities in Tokyo.
The U.S. currency is down more than 10 percent against major
currencies over the past four months.
DEFENSIVE
Stock markets were generally higher, renewing a rally that
have been underway since September.
The MSCI all-country world index <.MIWD00000PUS> was up 0.3
percent on the day with its emerging market component <.MSCIEF>
leading the way, up 0.6 percent.
MSCI's emerging market index has gained 12 percent this
year.
European stocks also rose on Thursday, but uncertainties
about company earnings prompted investors to take shelter in
more defensive shares.
The FTSEurofirst 300 <> index of top European shares
was up 0.4 percent.
Investors were eyeing more earnings results. Morgan Stanley
<MS.N> reported a surprise loss on Wednesday and Credit Suisse
<CSGN.VX> reported on Thursday that its third-quarter net profit
tumbled 74 percent to miss forecasts.
"Caution is still a watchword and we certainly remain very
data-sensitive," said Keith Bowman, equities analyst at
Hargreaves Lansdown.
He added, however, that there was a general mood of optimism
on stock markets because China's economy seemed to be in
reasonable shape and central banks were keeping liquidity
flowing.
(Additional reporting by Naomi Tajitsu and Atul Prakash;
Editing by Toby Chopra)
