London - World stocks ticked higher on Thursday, erasing early losses, while the euro hit a two-month peak against the dollar after Wall Street major JPMorgan reported strong second-quarter earnings.
JPMorgan's earnings jumped to $4.8bn from $2.7bn as loan loss reserves declined, setting the bar high for other big banks soon to produce results.
Advanced Micro Devices and Google are due to report later.
Strong earnings helped allay investor concerns about the pace of the economic recovery, fuelled after the Federal Reserve suggested on Wednesday the need for additional measures if an already softening outlook took a noticeable turn for the worse.
"(JPM reported) very solid results. There is potentially more to come as the economy stabilises and begins to pick up growth. Banks are highly reliant upon their trading activities and JPMorgan obviously being no exception," said Peter Dixon, economist at Commerzbank.
"It still remains to be seen whether the trading businesses can produce this kind of stellar growth at a time when market volatility is picking up." MSCI world equity index was up slightly on the day, just off a three-week peak hit on Wednesday.
The Thomson Reuters global stock index was also steady.
The FTSEurofirst 300 index rose 0.2%, reversing early losses, while emerging stocks were still down a quarter percent.
China stocks fall
China's key stock index ended 1.9% lower, its biggest fall in two weeks, as Agricultural Bank of China disappointed with a lacklustre Shanghai debut. AgBank, the most active stock, ended up 0.8% at 2.7 yuan compared with its IPO price of 2.68 yuan.
Earlier data showed China's economic growth moderated to 10.3% in the second quarter from 11.9% in the first quarter, slightly below forecasts of 10.5% growth.
The euro rose as high as $1.2834 while the dollar remained under pressure after the Fed minutes, losing 0.6% against a basket of major currencies.
"The Fed minutes were particularly dovish, with the discussion about the possibility of easing measures providing a soft underbelly for the dollar," said Chris Turner, currency strategist at ING.
The yen rose 0.3% to
¥88.12 per dollar after the Bank of Japan said it expected the economy to grow at its fastest pace in a decade in the year to March 2011, but said the eurozone debt crisis could pose a risk to the outlook.
The central bank kept interest rates unchanged at 0.1%, as widely expected.
Bund futures lost 39 ticks.
US crude oil rose 0.4% to $77.36 a barrel.
- Reuters