Forecast-beating results from U.S. bellwether Alcoa helped lift European stocks, draw global equities out of the red and set Wall Street on track for gains on Thursday, Reuters reported. Currency markets also reversed some of their recent cautious patterns and oil halted a six-session losing streak. The Bank of England, as expected, keep interest rates on hold at a record low of 0.5 percent but surprised some in the market by not expanding its quantitative easing scheme to sustain attempts to lift Britain out of recession. Alcoa kicked off the U.S. earnings season on Wednesday by reporting a third consecutive quarterly loss, but it beat estimates by a large margin due to cost cuts. Stock markets have been hit over recent weeks as second thoughts about the chances of a quick global economic recovery have taken hold. The corporate earnings reporting season is likely to dominate bourses as it gets under way properly next week for what it says about how companies are weathering the global recession. "There has been nothing reassuring in macro data lately, so people are really hoping for good surprises on the earnings front," said David Thebault, head of quantitative sales trading, at Global Equities, in Paris. World stocks as measured by MSCI were up about 0.4 percent, following seven consecutive sessions of losses. The FTSEurofirst 300 index of top European shares was up more than 1 percent, bouncing back from a 10-week low hit on Wednesday. Earlier, however, Japan's Nikkei closed down 1.4 percent on economic worries. European shares were also helped by rising energy company stocks, lifted by oil prices rising above $61 a barrel. Foreign exchange traders reversed some of their previous risk-aversion trades with Japan's yen falling after hitting a five-month high against the dollar on Wednesday. The dollar also dipped against currencies other than the yen. Sentiment was helped by a report from the International Monetary Fund on Wednesday saying the global economy was slowly starting to pull out of a deep recession, although the recovery would be sluggish. The euro was up half a percent at $1.3956 and the dollar gained a bit on the yen. Euro zone government bond futures retreated from two-month highs hit in after-hours trade the previous session, tracking moves in U.S. Treasuries which succumbed to profit-taking after a sharp rally. Treasuries shot higher, pushing 10-year yields to seven-week lows, after an auction of 10-year paper attracted surprisingly strong demand late on Wednesday. That gave Bunds a lift in after hours trading, also prompting investors to book profits.
