* European shares rise for 10th session running
* Forecast-beating euro zone PMIs, German IFO help
* Focus on University of Michigan consumer sentiment data
By Emelia Sithole-Matarise
LONDON, July 24 (Reuters) - World stocks extended gains to
9-month highs on Friday, denting demand for less risky
government bonds after better-than-expected euro zone economic
data bolstered optimism about economic recovery.
The euro advanced broadly and European shares climbed for a
10th session running after a better-than-expected German
sentiment survey and improved data on the euro zone services and
manufacturing sectors. [] [] <ECON>
Gold rose back above $950 an ounce while oil scaled a three
week high, advancing towards $68 on the back of the runup in
global equities and gains in gasoline prices.
The macro data helped offset disappointing results from
Microsoft <MSFT.O> late on Thursday and gloomy comments from
Ericsson <ERICb.ST>, keeping the bid for riskier assets alive,
but some strategists the share market rally was due a pause.
"The rally over the past two weeks has been very fast and
the market is now dangerously overbought. We're due for a pause,
which would be healthy if we want to keep the upside trend
alive," said Alexandre Le Drogoff, technical analyst at Aurel
BGC.
"But I'm still cautious on the longer term. We haven't seen
yet a reversal of the downtrend started two years ago."
The MSCI world equity index <.MIWD00000PUS> rose 0.3 percent
to its highest since mid-October. It has risen more than 6
percent this week and since January has climbed by more than 14
percent, recovering some of the 43.5 percent decline suffered
last year.
The pan-European FTSEurofirst 300 index <> rose 0.3
percent. U.S. stock futures pointed to a slightly firmer open on
Wall Street a day after the Dow Industrials surged above 9,000.
BOND YIELDS SEEN UP
Gold rose back above $950 an ounce while oil scaled a three
week high, advancing towards $68 on the back of the runup in
global equities and gains in gasoline prices.
U.S. Treasuries and euro zone government bond prices
retreated, pushing yields up with a record $115 billion in U.S.
debt auctions due next week refuelling supply fears, weighing on
sentiment. Bond prices and yields move inversely.
"The move out of bonds into stocks and the announcement of
$115 billion in U.S. Treasury supply next week may keep yields
skewed to the upside," said Kenneth Broux, market economist at
Lloyds TSB in London.
The euro <EUR=> rose half a percent to $1.4233 by midsession
in Europe, after climbing as high as $1.4245. Its gains helped
to nudge the dollar index <.DXY> down 0.2 percent on the day.
The common currency also gained traction against sterling
after figures showed Britain's economy shrank more than twice as
fast as expected in the second quarter. []
Data on Thursday, showing a rise in U.S. jobless claims,
dampened optimism about the pace of recovery for the world's
biggest economy, which had been buoyed earlier this week by
broadly stronger-than-feared corporate earnings.
Investors will be looking to Friday's release of the final
July Reuters/University of Michigan consumer sentiment index for
the next clues on the economic outlook. <ECONUS>
Asian stocks hit a 10-month peak on Friday, with Hong Kong
vaulting back to levels last seen before the collapse of Lehman
Brothers last September as investors rushed into equities
following upbeat corporate earnings around the world.
(Additional reporting by Blaise Robinson; Editing by Ruth
Pitchford)
