* Disappointng earnings pressure stocks.
* Dollar rises as euro rate expectations fall
* Bank of England eyed for possible rate rise
By Jeremy Gaunt, European Investment Correspondent
LONDON, Feb 10 (Reuters) - Disappointing corporate earnings
weighed on global stock markets on Thursday, pushing major
indexes lower, while shifting interest rate expectations lifted
the dollar and put Britain's pound on edge.
Investors were also cautious about a Bank of England meeting
later in the day, wary in case it makes its first move to
tighten policy since the start of the financial crisis.
After weeks of generally positive news on the corporate
front, investors have suddenly been presented with a barrage of
less than robust reports.
Strong corporate earnings and the expectations of more to
come have been a major driver of equities in the past year,
backed by an improving economic climate.
In Europe, major bank Credit Suisse <CSGN.VX> missed profit
expectations because of debt charges, and Diageo <DGE.L>, the
world's biggest spirits group, missed expectations with just a 9
percent rise in half-year earnings.
U.S. tech giant Cisco Systems Inc <CSCO.O>, meanwhile,
reported quarterly results after the New York market close on
Wednesday, beating profit and sales beat expectations but with
disappointing margins.
Its stock fell nearly 10 percent in extended trading.
"Most earnings themselves have been supportive, but if you
look at the guidance and the impact of inflationary pressure,
what is almost certain is that this will have an impact on
profit margins," said Jeremy Batstone-Carr, strategist at
Charles Stanley.
MSCI's all-country world index <.MIWD00000PUS> was down 0.6
percent, pressured in particularly by emerging markets. The EM
sub-index lost 1.8 percent.
Europe's FTSEurofirst 300 <> was down 0.6 percent,
even with an upward boost from Deutsche Boerse <DB1Gn.DE>, which
looks set to buy peer NYSE Euronext <NYX.N>.
Earlier, Japan's Nikkei closed down 0.1 percent.
Most developed markets remain in the black for the year
however, with U.S. indexes leading the way, reflecting a shift
this year from emerging markets to developed ones.
DOLLAR RISES
The dollar rose more than half a percent against a basket of
major currencies <.DXY>.
The euro was pressured by fading prospects for a European
Central Bank rate rise and Britain's pound weakened ahead of the
BoE meeting.
The euro <EUR=> was down 0.6 percent against the dollar at
$1.3646 having risen to $1.3745 in U.S. trade on Wednesday.
"It's difficult for now for the euro to rise above the peak
it hit earlier this month. It will need a fresh factor to push
it beyond that high," said Keiji Matsumoto, a strategist at
Nikko Cordial Securities.
Financial markets see a one-in-five chance that the Bank of
England will raise interest rates from their record low 0.5
percent later after what is likely to be its most finely
balanced decision in years.
Inflation pressures are growing in Britain, but economic
recovery is very fragile. The pound was down 0.2 percent at
$1.606 <GBP=.
Pressure was also growing again on peripheral euro zone
debt. The yield on 10-year Portuguese bonds climbed to its
highest since the launch of the euro <PT10YT=TWEB>.
The cost of insuring against a default rose for Greek,
Portuguese, Spanish and Irish bonds.
The mood raised demand for core euro zone debt.
(Additional reporting by Neal Armstrong and Brian Gorman;
Editing by Toby Chopra)
