Asia stocks up on earnings; dollar hits 3-mth low

Robust quarterly earnings from Europe drove world stocks higher on Thursday, while the dollar hit a three-month low on the back of weak US data and a downbeat assessment of the economy from the Federal Reserve.

Investors took heart from results for companies including Shell, Rolls Royce or BAE Systems while there were gains for French service group Capgemini and France Telecom, Europe's third largest telecom operator by market cap.

Global equities measured by MSCI All-Country World Index added 0.3 per cent, and the Thomson Reuters global stock index also put on 0.4 per cent.

UBS raised European shares to "neutral" from "underweight", citing "compelling valuations, economic data and relief for the banks to boot."

"The market is embracing decent corporate headline numbers, but there is still a lot for it to digest," Henk Potts, equity strategist at Barclays Wealth.

Credit Agricole CIB said that 48 S&P 500 companies, or 10 per cent of the index, that reported second quarter results on Wednesday had an average surprise in earnings at +3 per cent versus +12 per cent so far this earnings season and an average surprise in sales of -3 per cent versus +3 per cent so far.

The pan-European FTSEurofirst 300 advanced 0.5 per cent, though Tokyo's Nikkei average fell 0.6 per cent after hitting a two-week closing high in the previous session.

US WEAKNESS

The Fed's Beige Book, a summary of national economic conditions, also showed activity was not as robust in a few districts and had lost steam in recent weeks.

California's declaration of a state of emergency over its finances also hurt the dollar, which fell 0.5 per cent against a basket of currencies, hitting a near three-month low.

The euro rose 0.5 per cent to $1.3057, reaching an 11-week high, and sterling gained 0.3 per cent to $1.5638, close to a five-month maximum hit in European trade at $1.5656.