* MSCI world equity index up 0.9 pct at 219.77
* Ford results lift mood, Ifo, banking results also help
* UK GDP hits sterling, boosts govt bonds
By Natsuko Waki
LONDON, April 24 (Reuters) - World stocks and the euro rose
on Friday after better-than-expected Ford Motor results and an
upbeat key German corporate sentiment survey, while
disappointing UK growth data knocked sterling.
Ford <F.N> posted a smaller-than-expected first-quarter
loss, saying it was on track to at least break-even in 2011 and
did not expect to seek U.S. government loans. U.S. stock futures
were pointing to a firmer open on Wall Street later.
Earlier in Europe, risky assets were buoyed by the Ifo
Institute's business climate index which rose to 83.7 in April,
against a consensus for a rise to 82.3. It added to hopes that
the downturn in Europe's largest economy may be easing.
"It is very easy to simply run with the pack and to dismiss
first signs of green shoots. However, these green shoots are
there," said Carsten Brzeski, economist at ING Financial
Markets.
"Is this the end of the crisis? No, it is not, but the free
fall of the economy seems to have come to an end, leading to a
fragile stabilisation in the second half of the year."
MSCI world equity index <.MIWD00000PUS> rose 0.9 percent on
the day. If the index ended up on the week, it would be the
seventh straight week of gains. The FTSEurofirst 300 index
<> rose 1.3 percent on the day.
U.S. stock futures were up around 0.7 percent <SPc1>,
pointing to a firmer open on Wall Street later.
The focus is also on banks after big U.S. regional banks,
including PNC Financial Services Group <PNC.N> and Fifth Third
Bancorp <FITB.O>, reported better-than-expected first-quarter
earnings on Thursday.
Earnings results have been so far mixed with investors
reacting more sensitively to positive earnings reports. In
Europe so far, 30 companies in the DJ Stoxx 600 index <>
have reported their earnings, of which 18 beat estimates and 12
missed forecasts.
"The cyclical stocks will continue to benefit from less weak
economic conditions than people feared," said Darren Winder,
equity strategist at Cazenove.
"The defensive stocks are also attractive (after recent
falls), so the market should get more breath. If it gets more
breath it will help its advance."
Emerging stocks <.MSCIEF> rose 0.6 percent.
UK SHOCK
Sterling fell as low as 90.75 pence per euro <EURGBP=> after
data showed the UK economy shrank 1.9 percent on the quarter in
the Q1, the biggest contraction since Q3 1979.
The low-yielding yen, which tends to attract safety-seeking
flows, hit a 4-week high against the dollar of 96.65 per dollar
<JPY=>. The currency was boosted by nervousness surrounding the
looming outcome of the U.S. government's stress tests on 19
major domestic banks, due on May 4.
"Though the end of the stress test process is supposed to
bring much needed transparency, we fear that the cyclical rise
in defaults will cause painful losses - given the unprecedented
rise in the banks' balance sheet over the past 10 years - which
the stress test is likely to highlight," Societe Generale said
in a note to clients.
The dollar fell 0.7 percent <.DXY> against a basket of major
currencies. The euro rose 0.9 percent to $1.3261 <EUR=>, hitting
the session high after the Ifo survey.
The June bund futures <FGBLc1> rose 39 ticks.
U.S. crude oil <CLc1> rose 0.4 percent to $49.86 a barrel.
(Additional reporting by Dominic Lau; Editing by Andy Bruce)
