GLOBAL MARKETS-Earnings optimism boosts stocks, euro

                                
* MSCI world equity index up 0.6 pct at 277.35
                                
 * Earnings optimism fuels gains
                                
 * Euro hits two-month high vs dollar; oil rises
                                
 
                                
 By Natsuko Waki
                                
 LONDON, July 8 (Reuters) - World stocks rose on Thursday
while the euro hit a two-month peak against the low-yielding
dollar on rising expectations the forthcoming earnings season
would show strong corporate performance.
                                
 Wall Street posted its best one-day gain in about six weeks
on Wednesday after financial company State Street <STT.N> said
quarterly earnings would far exceed expectations, providing a
lifeline to investors after several weeks of dismal economic
reports.
                                
 "Positive comments from State Street ... cheered investors
up on the basis that we've got the second-quarter reporting
season coming up and perhaps the bank situation in terms of
reporting might not be as bad as feared," said Richard Hunter,
head of UK equities at Hargreaves Lansdown.
The MSCI world equity index <.MIWD00000PUS> rose 0.7 percent
to a 1-1/2 week high. The Thomson Reuters global stock index
<.TRXFLDGLPU> also rose 0.7 percent.
                                
 According to Thomson Reuters data, quarterly earnings of S&P
500 companies are expected to rise 27.1 percent in the second
quarter after surging 58.3 percent in the first quarter.
                                
 The FTSEurofirst 300 index <.FTEU3> gained nearly 1 percent,
led by Danish shipping and oil conglomerate A.P. Moller-Maersk
<MAERSKb.CO>, which rallied 6 percent after the company upgraded
its earnings guidance for the full year.
                                
 Expectations that stress tests for European banks will not
be as stringent as feared also supported the sector, together
with some upbeat broker comment.
                                
 Credit Suisse raised its sector strategy on European banks
to benchmark from 10 percent underweight in a global equity
strategy note. [ID:nWNAB3897]
                                
 Emerging stocks <.MSCIEF> rose more than 1 percent while
U.S. stock futures were steady <SPc1>.
                                
 
                                
 ECONOMIC OPTIMISM
                                
 Oil prices [O/R] jumped to a one-week high above $75 a
barrel on an industry report showing U.S. crude inventories
plunged last week, stock market gains and hopes global economic
recovery is still intact.
                                
 "The fear over a double-dip recession or something more
dramatic has eased a little bit from a month ago," said Yingxi
Yu, Singapore-based commodities analyst with Barclays Capital.
                                
 "Market sentiment remains a very important driver. Oil
really follows equity markets and other risky assets."
                                
 The bund futures <FGBLc1> rebounded from an earlier two-week
low to gain 10 ticks.
                                
 Improving risk appetite pushed the euro to a two-month high
of $1.2687 <EUR=>, extending its strong run after hitting a
four-year low of $1.1876 in early June.
                                
 The next focus for the market is the European Central Bank,
which holds a news conference at 1230 GMT after its monthly
meeting.
                                
 It is expected to face pressure to say whether Europe-wide
stress tests on banks will be tough enough to convince markets
of their worth. [ID:nLDE6660PN] [nLDE6601T6]
                                
 The dollar <.DXY> hit a two-month low against a basket of
currencies, before erasing losses to stand up 0.1 percent on the
day.
 (Additional reporting by Tricia Wright; Editing by Ron Askew)