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GLOBAL MARKETS-Positive earnings drive stocks higher; yen dips

Published 04/29/2009, 07:17 AM
Updated 04/29/2009, 07:24 AM
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* MSCI world equity index up 0.6 percent at 219.13

* Positive earnings spur equity buying before US GDP, Fed

* Government bonds, yen fall; oil firmer

By Natsuko Waki

LONDON, April 29 (Reuters) - World stocks rose on Wednesday and government bonds and the low-yielding yen slipped as forecast-beating earnings from European companies spurred share buying ahead of key U.S. growth data.

Germany's Siemens rose 5 percent after reporting strong first-quarter figures, while Spain's Santander, the euro zone's largest bank, gained nearly 5 percent after beating Q1 forecasts.

French tyre maker Michelin rose 6.8 percent after it posted first-quarter sales slightly higher than expected. Royal Dutch Shell, Nordea and Sanofi-Aventis also posted better-than-expected Q1 results.

Investors were eyeing first-quarter U.S. growth data and the outcome of the Federal Reserve policy meeting, where the central bank is expected to hold its benchmark interest rate at zero to 0.25 percent.

"The corporate news has been reasonably strong... which has allowed us to get into positive territory," said Henk Potts, market strategist at Barclays Wealth. The MSCI world equity index rose 0.9 percent, edging towards a three-month high hit last week, while the FTSEurofirst 300 index rose 0.8 percent.

Emerging stocks rose more than 2 percent.

"People are starting to look beyond the worst and assuming to some extent an economic recovery can be expected later on this year," said Heino Ruland, strategist at Ruland Research.

U.S. crude oil rose 1.4 percent to $50.63 a barrel.

The June bund futures fell 40 ticks, as safety-seeking flows waned.

The yen fell 0.6 percent to 97.03 per dollar while the euro rose 0.9 percent to $1.3254.

The dollar fell 0.7 percent against a basket of major currencies.

The Fed has left interest rates at a record low level since December. After its meeting in March, the central bank announced plans to pump an additional $1.15 trillion into the economy by buying mortgage debt and long-dated U.S. Treasuries. (Additional reporting by Jon Hopkins and Joanne Frearson; Editing by Ron Askew)

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