* World stocks hit a new 12-month high
* Dollar at 14-month low against major currencies
* Q3 results continue to beat expectations
By Dominic Lau
LONDON, Oct 20 (Reuters) - World stocks hit a new 12-month
high on Tuesday, powered by strong results from Apple Inc
<AAPL.O> and Texas Instruments <TXN.N> and helping to push the
dollar to a new 14-month low against a basket of currencies.
The strength in global stocks, up 75 percent from crisis
lows, boosted optimism on corporate earnings and the global
recovery, encouraging traders to sell dollars for
higher-yielding currencies.
Crude and gold prices meanwhile eased from their earlier
highs, while safe-haven government bonds were largely steady.
The MSCI All-Country World Index <.MIWD00000PUS> was up 0.2
percent at 300.00 points, after hitting 300.77 -- its highest
level since late September 2008.
The gains in the index, up more than 75 percent since
hitting a low in March 2009, was partly aided by a rally in
emerging market shares.
MSCI emerging equities index <.MSCIEF> on Tuesday rose 0.4
percent after hitting a new 14-month high, and has risen nearly
120 percent from lows recorded in March.
The FTSEurofirst 300 <> index of top European shares
eased 0.3 percent after the previous session's sharp gains. In
Asia, Japan's Nikkei <> gained 1 percent.
Apple's profits and sales beat Wall Street forecasts as
iPhone and Mac sales hit quarterly records, while Texas
Instruments cited strong demand from every industry that uses
its chips for its better-than-expected third-quarter results.
These came on the back of strong quarterly earnings from
Intel <INTC.O> and JPMorgan <JPM.N> last week, sustaining the
sharp rally in equities and other riskier assets.
"It is what I call 'steady as she goes'. Stay in the asset
classes that are doing well for the moment. Don't get carry
away," said Michael Dicks, head of research and investment
strategy at Barclays Wealth.
"Obviously next year ... you have got a fair amount of time
to look at how policymakers deliver their 2010 and talking about
2011 budgets. That's probably going to be the key how quickly
they decide to start tightening up in countries that have been
performing well."
Apple shares traded in Frankfurt <AAPL.F> surged 5.7
percent, while shares in Texas Instruments traded in Frankfurt
<TXN.F> rose 2.9 percent.
Positive corporate results were also seen in Europe, with
LVMH <LVMH.PA> -- the world's biggest luxury goods group --
reporting a recovery in sales during the third quarter.
DOLLAR WEAK, COMMODS UP
The dollar fell 0.4 percent to 90.28 yen <JPY=>, while the
euro <EUR=> was down 0.1 percent to $1.4955 after touching its
highest level in 14 months at $1.4994 earlier -- a tad short of
$1.5000.
In Asia, the yuan junmped against the dollar in benchmark
offshore non-deliverable forwards (NDFs) on Tuesday as overseas
speculators bet on long-term appreciation of China's currency
against the dollar. The move implied a 12-month appreciation
versus the dollar of 4.55 percent, the most since August 2008.
The dollar has been under sustained pressure this year due
to expectations for low U.S. interest rates and questions about
its status as the world's reserve currency.
Yields on benchmark 10-year U.S. Treasuries <US10YT=RR> were
down 1 basis point at 3.380 percent, and those on the 10-year
euro zone Bund <EU10YT=RR> were down 2 basis points at 3.268
percent.
Crude futures <CLc1> rallied to a one-year high above $80 a
barrel, boosted by improving sentiment following strong
corporate earnings.
Also in the commodity sector, gold <XAU=> rose closer to
last week's record highs above $1,070 an ounce as the dollar
<.DXY> fell to a 14-month low against a basket of major
currencies.
Societe Generale said in a note this week that investors
tended to increase their positions in the best performers and
sell the worst performers as they tried to window dress near the
the year-end.
"Our full scale back tests ... prove that, when getting
close to year-end, playing a momentum-based strategy (going long
on the past outperformers, and shorting the past
underperformers) has more than a 50 percent chance of success
across the full spectrum of asset classes," Societe Generale
said in a note.
"Therefore, it is highly probable, all else being equal,
that risky assets will do well by year-end."
(Editing by Stephen Nisbet)
