* MSCI world equity index up 0.6 pct at 262.13
* China central bank reaffirms loose monetary policy
* Commodities firmer; U.S. dollar, Treasury prices down
By Dominic Lau
LONDON, July 30 (Reuters) - World stocks and commodity
prices rose on Thursday after China's central bank reaffirmed
its commitment to "appropriately loose" monetary policy and
European company earnings cheered investors.
The dollar and government bonds fell.
Worries that the People's Bank of China might be prepared to
tighten lending had spooked investors who had banked on
continuing loose monetary policy helping revive both domestic
and global growth. [] []
On earnings, British telecoms group BT <BT.L> posted a
better-than-expected 3 percent fall in first-quarter adjusted
core earnings while Volkswagen's <VOWG.DE> second-quarter
operating profit beat expectations.
"The market looks as if it will continue to push higher on
the back of better corporate earnings and a more benign economic
outlook," said Manoj Ladwa, senior trader at ETX Capital, in
London.
"But a lot of the improvement in corporate performance has
been down to cost cutting, stock market volumes are still low,
confidence is fragile and there are a growing number of bears."
Global equities were in demand on Thursday, with the MSCI
world equity index <.MIWD00000PUS> advancing 0.6 percent after
two days of loss.
The global index is up 7 percent this month after losing 0.7
percent in June to break a three-month winning streak.
In Europe, the FTSEurofirst 300 index <> rose 1.2
percent, while Japan's Nikkei average <> put on 0.5
percent, hitting its highest close in nine months, and Chinese
stocks <> gained 1.7 percent after a 5-percent sell-off on
Wednesday.
BT shares soared more than 10 percent and those for
Volkswagen gained 4.4 percent.
EARNINGS IMPROVED
According to Thomson Reuters data, the second-quarter
blended earnings growth rate for DJ STOXX 600 <> improved
to -40.4 percent on Wednesday close from -43.9 percent a week
ago. So far 95 companies have reported, of which 50 beat
estimates, two matched and 43 missed, the data showed.
U.S. stock index futures <DJc1> <SPc1> <NDc1> rose 0.8
percent, indicating a higher start for Wall Street ahead of the
release of weekly jobless claims.
German unemployment unexpectedly fell for the first time in
nine months in July, aided by government measures ahead of
September's federal election [], while euro zone
economic sentiment increased in July to its highest level in
eight months, signalling the economy is bottoming out
[]
Metal prices rose, with copper <MCU3> regaining some ground
following a sell-off in the previous session.
Crude prices <CLc1> advanced above $64 a barrel after
sliding almost 6 percent the day before on data showing a jump
in U.S. crude stocks.
The euro was up 0.3 percent at $1.4077.
"The (euro zone economic sentiment) was pretty much bang in
line with expectations and helped the euro tick up against the
dollar," said Simon Derrick, head of currency research at Bank
of New York Mellon.
"But people are looking for more meaningful signs that the
recovery in the second half is sustainable, and the market is
gradually swaying toward a more defensive stance."
Yields on the benchmark 10-year U.S. Treasury <US10YT=RR>
rose 3 basis points at 3.694 percent, while the 10-year euro
zone benchmark <EU10YT=RR> bund yield was up 2 basis points at
3.45 percent.
(Additional reporting by Blaise Robinson in Paris and Nick
Vinocur in London; editing by Patrick Graham)
