World stocks shook off their earlier hesitant mood on Thursday and rose half a percent to two-week highs after JP Morgan's forecast-beating second quarter results continued the run of good news on the corporate earnings front, Reuters reported. JP Morgan said strength in its core consumer and investment banking businesses had offset credit losses and pushed net income per share to $0.28. This compares with a forecast of $0.05 per share. The news comes on top of strong earnings from sector peer Goldman Sachs and tech giant Intel this week, which together with strong Chinese growth data gave investors some reassurance on the global economy's recovery prospects. "(JP Morgan results) have given a shot in the arm to the markets " said Richard Hunter, head of equities at Hargreaves Lansdown in London. "It's too early to call the earnings season a success, but the early signs are positive as evidenced by a shift to risk taking on both sides of the pond." By 1130 GMT the FTSEurofirst 300 index of top European shares jumped 0.5 percent, while London's FTSE100, Germany's DAX and France's CAC-40 rose between 0.3 percent to one percent. Banking shares were the biggest beneficiaries, with shares in BNP Paribas, Lloyds and Banco Santander up more than one percent. MSCI global equities which has been buoyed six percent so far this week by the good news from Goldman Sachs and Intel, rose another 0.4 percent after a shaky start to the session. Emerging stocks rose to new two-week highs. And Wall Street was braced for a stronger opening, with Dow Jones Industrial Average stock futures up 4 points while S&P 500 futures were flat. As the flight to safety abated, the yen trimmed its early gains while the euro and sterling hit session highs versus the dollar. The euro rose to $1.4137 according to Reuters data, up from $1.4095 before the announcement. Sterling rose 0.2 percent to $1.6462 and both currencies relinquished early losses against the yen to trade roughly flat on the day. "Traders and investors are buying pro-risk currencies like sterling and are selling yen after the Q2 earnings from JP Morgan," said Neil Jones, head of hedge fund sales at Mizuho in London. But with a spate of earnings still to come -- including banking giant Citigroup and tech firms IBM and Google -- markets will remain on edge. "The market needs to see that recovery is there and that earnings have bottomed," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin. "So far we are getting indications of a better-than-expected second quarter earnings season, although it's very early." Markets were buoyed early in the session by China's second quarter gross domestic product which rose 7.9 percent against the previous year, beating forecasts for a 7.5 percent rise. The world's third-largest economy also grew 7.1 percent in the first half versus a year earlier. Coming on top of better-than-expected U.S. data and corporate results, the news suggested to investors that the recession is abating. But after an initial jump in Asian shares -- Tokyo markets briefly hit a one-week high and other Asian shares powered to a month-high -- gains were capped by trepidation about the upcoming results. Another sobering note was struck by Fitch which cut the outlook on New Zealand's 'AA-plus' rating to negative, citing the country's high debt levels and pushing the NZ dollar down more than 1.2 percent to $0.6413. "This... may refocus attention on concerns about sovereign risk that had been receding for a while," said Masafumi Yamamoto, head of FX strategy Japan at Royal Bank of Scotland, referring to sovereign ratings in general. Markets are also keeping a wary eye on the fate of CIT Group Inc, a U.S. lender to thousands of small and mid-sized businesses, after bailout talks with the government ended, a move that could drive it to bankruptcy. U.S. Treasuries fell after the JP Morgan results, reversing earlier gains, with 10-year yields rising to 3.60 percent from 3.585 earlier. Markets are now waiting for weekly U.S. jobless claims to see how the employment picture is shaping up in the world's biggest economy.
