- European stocks rise 0.5%
- Earnings optimism buoys tech shares, Apple results awaited
- Gold and silver hit record highs
- Dollar weakens despite US and European officials' support
LONDON, Jan 29 (Reuters) - World stocks gained on Thursday as investors' optimism over earnings remained robust ahead of Apple's results, while gold blazed to a record high for the ninth straight session and oil prices rose on U.S.-Iran tensions.
The Euro STOXX 600 gained 0.5% on the higher oil and precious metal prices, with indexes in Britain, Spain and France all making gains. German shares fell 0.9%, however. The euro zone's biggest economy on Wednesday.
Markets have been counting on earnings to keep equities in vogue as prospects for U.S. rate cuts before the summer fade.
On Wednesday, the U.S. Federal Reserve left interest rates unchanged as was widely expected, while Chair Jerome Powell talked of a "clearly improving" economic outlook and broad support on the committee as reasons for a pause.
Powell would not be drawn on whether he would remain as a Fed governor after he steps down as chair in May, given President Donald Trump's efforts to pressure the Fed into more aggressive rate cuts.
Investors reacted by cutting the chance of another cut by April to 26%, with June seen as the next likely window.
Deutsche Bank analysts wrote that its economists "see the Powell-led Fed as having now delivered its last rate cut," adding that "they think risks around their expectation of one rate cut this year in September have become more balanced."
On Wall Street, Apple results are in focus, with JPMorgan expecting earnings to beat consensus forecasts, driven by stronger iPhone 17 demand and slower growth in expenses.
S&P 500 futures and Nasdaq futures added around 0.2% each, with disappointment over Microsoft results tempered by strong guidance from Meta.
The rush into precious metals continued.
Gold added 2.2%, earlier hitting a record $5,594.82 an ounce . Its gains for this month alone now stand at around 28%. Silver also benefited, topping $120.
That helped Europe's basic resources index rise 3% to its highest since May 2008.
Oil prices hit a four-month high as Trump warned Iran of possible attacks if it did not make a deal on nuclear weapons.
Brent added 2.5% to $70.11 a barrel, while U.S. crude rose 2.6% to $64.83 per barrel.
Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan was little changed. But South Korea stocks rose 0.6%, bringing gains for January so far to a thumping 23%. The tech-heavy Taiwan market is up almost 13% in the same time period.
AI CAPEX VS EARNINGS
On Wednesday, Microsoft's shares slid 6.5% over concerns its capital expenditure would fail to make sufficient returns to justify its high valuation.
Meta lifted its outlook for revenues and capex for 2026, sending its shares up 8% after hours and adding around $140 billion to its market value.
"A common theme so far from META and MSFT is the larger-than-expected capex spending, indicating the upward momentum for AI spending," noted analysts at JPMorgan. The difference, they said, was Meta also raised its 2026 revenue outlook to well above market expectations.
In currency markets, the dollar was on the defensive as investors hedged against U.S. policy uncertainty and the country's ever-growing debt mountain.
Against a basket of currencies, the dollar was at 96.36 , languishing near Tuesday's four-year low of 95.57.
U.S. Treasury Secretary Scott Bessent insisted the administration still favoured a "strong dollar" policy.
European leaders voiced concerns at the dollar's slide, while officials at the European Central Bank suggested a further steep rise in the euro could warrant interest rate cuts.
The euro added another 0.2% to $1.1979 , while the dollar lost 0.3% on the Swiss franc to 0.7658 . It also dipped 0.3% on the Japanese yen to 153.03 .
Reporting by Tom Wilson in London and Wayne Cole in Sydney; Editing by Sonali Paul, Jacqueline Wong, Jane Merriman and Andrew Heavens
Source: Reuters