* World stocks up on earnings boost
* Wall Street set for flat to lower start
* Euro firmer
By Jeremy Gaunt, European Investment Correspondent
LONDON, July 28 (Reuters) - World stocks rose for the fifth
session in a row on Wednesday, supported by solid corporate
earnings but held back from greater gains by concerns over U.S.
economic weakness.
Wall Street looked set for a flat to weak open. The dollar
recovered earlier losses to trade flat against a basket of major
currencies.
MSCI's all-country world index <.MIWD00000PUS> was up 0.3
percent against the previous close and the Thomson Reuters
global stock index <.TRXFLDGLPU> gained about the same.
The MSCI index touched a 2-1/2 month high during Tuesday's
session.
Earnings reports in Europe and Japan were supporting prices,
but weaker oil prices hit energy stocks..
"Earnings are coming through better than expected," said
Bernard McAlinden, investment strategist at NCB Stockbrokers in
Dublin.
Among European companies reporting forecast-beating results
were Spanish bank BBVA <BBVA.MC>, British American Tobacco
<BATS.L>, German chipmaker Infineon <IFXGn.DE> and the world's
leading luxury goods group LVMH <LVMH.PA>.
The FTSEurofirst 300 <> was up 0.1 percent. Earlier,
Japan's Nikkei <> climbed 2.7 percent for its highest close
and biggest one-day gain in two weeks. Canon <7751.T> jumped 5.7
percent after the world's No. 1 camera maker reported its
strongest profit in seven quarters.
The positive earnings sentiment was vying with concerns
about a slowing U.S. economy, epitomised by mixed economic data
on Tuesday. Home prices rose in May, but labour-market worries
took July consumer confidence to its lowest since February.
U.S. financial services firm State Street suggested on
Tuesday, however, that confidence among institutional investors
was rising across the board and that good valuations were
attracting them back into equities.
EURO REBOUND
The euro hit a two-month high against the yen before
slipping back a bit and was generally firm against the dollar as
recent signs of resilience in the euro zone economy and solid
bank earnings brought out buyers.
Against the dollar, the euro was up 0.1 percent at
$1.3007<EUR=>, having earlier hovered near an 11-week high of
$1.3047 struck on Tuesday.
"The market is starting to believe there's a (European)
recovery in place, but there is thin liquidity behind it," said
Neil Mellor, currency strategist at Bank of New York Mellon.
Euro zone government bond yields fell with peripheral
sovereign debt outperforming. Portuguese government bond prices
rose after a sale of Portuguese debt drew robust demand,
(Additional reporting by Brian Gorman and Neal Armstrong;
editing by Stephen Nisbet)
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