* World stocks hit 12-month high, up 0.7 pct <.MIWD00000PUS>
* Dollar hits 14-month low vs euro <EUR=>
* U.S. bank earnings results in focus
By Tamawa Desai
LONDON, Oct 14 (Reuters) - World stocks hit a 12-month high
on Wednesday as forecast-beating Intel Corp <INTC.O> results and
Chinese trade data brightened the economic outlook, while the
dollar plumbed 14-month lows, sending oil and gold higher.
MSCI's all-country world index <.MIWD00000PUS> rose 0.7
percent to 294.41, a level last seen in early October a year
ago. The index was up 29 percent this year, with a more than 71
percent gain since hitting a six-year low in March.
European shares <> rose 1.2 percent led by banks,
technology and energy sectors, while U.S. stock futures were
gained some 1.0 percent <SPc1> after stellar results from Intel,
the world's largest chip-maker, after the bell in Wall Street on
Tuesday.
U.S. corporate earnings continue to be the dominant driver
of risk sentiment.
"Whilst we have rallied strongly since the March lows, the
release of Q3 earnings from some of the world's largest
financial institutions over the next 48 hours could well dictate
confidence, and indeed direction, for the rest of 2009," said
John Murphy, analyst at ODL Securities.
JPMorgan Chase <JPM.N> releases results later in the day.
Citigroup <C.N> and Goldman Sachs <GS.N> are slated for
Thursday.
Data showed the pace of Chinese exports and imports slowed
in September, boding well for China's recovery [].
Chinese copper imports in particular were a surprise, jumping 23
percent against an expected fall, pushing London copper futures
up 2 percent.
MSCI's emerging market equities index <.MSCIEF> also rose,
reaching its highest since late August 2008 above 965 and
gaining 1.5 percent on the day.
But Thailand's benchmark stock index <> slipped more
than three percent.
GOLD AT RECORD, OIL AT YEAR HIGHS
Gold <XAU=> hit a record above $1,070 an ounce and oil
<CLc1> rose to a 2009 peak above $75 a barrel as the dollar
slipped to its weakest in more than a year.
The weaker dollar boosted gold's appeal as an alternative
investment and making commodities cheaper for non-dollar buyers.
The dollar hit 14-month lows against the euro of $1.4906
<EUR=>, according to electronic trading platform EBS.
"The upward pressure in commodity prices, especially oil
climbing to the $74-$75 level, combined with decent expectations
for Q3 earnings have contributed to upward pressure in
euro/dollar," said Kasper Kirkegaard, currency strategist at
Danske Markets in Copenhagen.
Growth and commodity linked currencies such as the
Australian and Canadian dollars also rose against the U.S. unit.
FED, BOJ
Risk assets were also fuelled on expectations that interest
rates in major economies would stay at rock-bottom levels for
some time, providing cheap funding for investors.
U.S. Federal Reserve Vice Chairman Donald Kohn said on
Tuesday the economy would likely be producing "well below" its
potential for some time and that expectations of future
inflation would more likely fall than rise. []
"I expect that, for a while, the risk of further declines in
underlying rates of inflation will be greater than the risk of
increases," he told the National Association of Business
Economics.
The Bank of Japan left key interest rates unchanged at 0.1
percent on Wednesday as expected, and BOJ Governor Masaaki
Shirakawa said the board decided it was best to review the
central bank's corporate lending measures at its next meeting or
later. []
The yen got a boost against the dollar after a deputy of
Japanese Finance Minister Hirohisa Fujii said Japan should not
step into the foreign exchange market just because the yen
rises. []
"The current yen rise is due to the dollar weakness rather
than the yen's strength," Naoki Minezaki, one of the
government's two senior vice finance ministers, told Reuters in
an interview. "The dollar weakness is likely to persist."
(Additional reporting by Jeremy Gaunt, Atul Prakash and Naomi
Tajitsu; Editing by Victoria Main)
