* World shares rally on earnings, CIT news
* Asia ex-Japan shares at 2009 high
* European shares rise 1 percent
* Dollar at six-week low against major currencies
By Jeremy Gaunt, European Investment Correspondent
LONDON, July 20 (Reuters) - World stocks built on an already
robust performance from last week on Monday, climbing on
better-than-expected corporate earnings results and a
last-minute rescue package for troubled U.S. lender CIT.
Asian shares outside Japan hit a 2009 high. European shares
were up 1 percent.
Foreign exchange traders moved into riskier currencies,
sapping yen strength and taking the dollar to a six-week low
against a basket of major currencies <.DXY>.
Government bonds sold off, showing investors were prepared
to take on more risk, and oil rose above $64 a barrel.
"We're expecting a risk-on day today," said Carl Hammer,
currency strategist at SEB Merchant Banking in Stockholm.
MSCI's all-country world stock index <.MIWD00000PUS> was up
0.9 percent, adding to a 6.6 percent gain last week. Its
emerging market counterpart <.MSCIEF> gained 2.4 percent.
The catalyst for the recent rally in stocks has been a
series of better-than-expected corporate earnings reports,
notably from IBM <IBM.N>, Goldman Sachs <GS.N> and Intel
<INTC.O>.
Sentiment was also helped by news CIT Group Inc <CIT.N> had
clinched a last-minute $3 billion rescue by a group of
bondholders and probably escaped bankruptcy. CIT lends to nearly
one million small and mid-sized U.S. businesses. []
The pan-European FTSEurofirst 300 <> index of top
shares was up 1 percent, taking it up around 35 percent since
hitting its lifetime low of March 9.
Japanese markets were closed for a holiday.
DOLLAR DIVES
The dollar fell to a six-week low against a basket of
currencies, dropping as low as 78.994, its lowest level since
early June.
The euro also hit a six-week high against the dollar at
$1.4207 <EUR=>
The U.S. currency has been falling recently when market
sentiment becomes bullish about recovery, raising appetite for
riskier, high-yielding currencies.
"The earnings and data from the housing sector suggest the
U.S. economy is showing signs of a recovery although investors
are still reluctant to pour capital in to it," said Richard
Grace, senior currency strategist at Commonwealth Bank of
Australia, Sydney.
Euro zone government bond yields rose, with the interest
rate-sensitive two-year Schatz yield <EU2YT=RR> at 1.317
percent.
(To read Reuters Global Investing Blog click on
http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge Hub
click on http://blogs.reuters.com/hedgehub)
(Editing by Ruth Pitchford)
