* Earnings hopes help lift world stocks
* Euro steady after Japan buying pledge
* Risk premium eases for Spain, Portugal debt
(Updates prices, adds detail)
By Jeremy Gaunt, European Investment Correspondent
LONDON, Jan 11 (Reuters) - World stocks firmed on Tuesday on
hopes for a solid earnings season, while the euro steadied above
four-month lows after Japan offered to buy euro zone bonds.
Japan said it was considering buying about 20 percent of the
bonds to be jointly issued later this month to raise funds to
support Ireland, but investors remained cautious ahead of a
make-or-break debt auction in struggling Portugal on Wednesday.
[]
Spain will follow suit on Thursday.
European stocks rose, bouncing back from the previous
session's losses, lifted by forecast-beating results from U.S.
aluminium major Alcoa <AA.N> after the Wall Street closing bell
on Monday, which marked the start of the U.S. earnings season.
[]
The FTSEurofirst 300 <> gained 1.2 percent. World
stocks as measured by MSCI <.MIWD00000PUS> were up 0.4 percent
with emerging markets <.MSCIEF> gaining 0.6 percent.
Stock index futures indicated a higher open for Wall Street
<SPc1> while Japan's Nikkei closed down 0.3 percent.
Analysts said the prospect of solid corporate earnings was
generally giving stock investors the room to look past euro zone
debt concerns for the time being.
"The focus is switching to companies' results this week,
with earnings due from big U.S. names such as JPMorgan <JPM.N>,
but the euro zone debt fears will remain in the backdrop and
could continue to weigh on banking stocks," said Geraud
Missonnier, trader at Saxo Banque in Paris.
Banking stocks were among the top gainers on Tuesday,
reversing recent losses -- the STOXX 600 European banks index
<.SX7P> was trading 1.8 percent higher, helped by upbeat notes
from Citigroup and Societe Generale.
An upbeat outlook from Siemens <SIEGn.DE>, Europe's biggest
engineering conglomerate, also helped European stocks. It said
first-quarter profit and sales were set to surpass year-earlier
figures, thanks to robust factory demand. []
JAPAN RESCUE?
Japan pledged to buy euro zone bonds this month in a show of
support for Europe's debt struggle, but market players doubted
the gesture would offer the euro much relief.
The euro steadied above a four-month trough, but the focus
was on this week's heavy schedule of debt issuance by southern
European countries.
"The euro remains a sell on rallies," said Jeremy Stretch
head of currency strategy at CIBC World Markets.
The single currency was up a little on the day at $1.2955
<EUR=>.
Portuguese Prime Minister Jose Socrates attempted to put a
floor under persistent talk that his country will seek an
international bailout, saying there were no such plans and that
the 2010 budget gap was lower than its goal. []
But a Portuguese central bank board member, Teodora Cardoso,
was quoted as saying Lisbon would do better to seek
international financing, breaking ranks with political leaders.
The premium investors demand to hold bonds issued by Spain,
Italy and Portugal, rather than low risk German Bunds reversed
earlier widening with traders citing European Central Bank bond
buying.
The 10-year Spanish/German <ES10YT=TWEB> yield spread was
1.5 basis points tighter on the day at 270 bps, with the
equivalent Portuguese <PT10YT=TWEB> spread 7 bps tighter on the
day at 419 bps.
(Additional reporting by Anirban Nag and Blaise Robinson;
Editing by Mike Peacock)
