* Wall St rises on strong earnings
* European shares post biggest one-day gain in 7 months
* Euro dips against dollar after weak German PMI data
* Commodities slip as China data adds to demand concerns
By Angela Moon
NEW YORK, April 23 (Reuters) - Global equity markets rose on
Tuesday, as Wall Street shares surged on strong corporate
earnings and European shares posted their biggest one-day gain
in seven months, while the euro hit a two-week low against the
dollar after weak German data sparked speculation the European
Central Bank could cut interest rates.
On Wall Street, the major indexes jumped more than 1 percent
and were on track for a third straight day of gains on strong
earnings from insurer Travelers Cos Inc and others,
though investors said recent volatility was likely to return.
The euro fell as low as $1.2971 and could break
decisively out of the $1.30 to $1.32 range that has held for the
past couple of weeks. It was last down 0.7 percent on the day at
$1.2978.
The latest Purchasing Managers' Indexes (PMIs) for the euro
zone raised concerns about the economic health of the region,
with business activity in Germany -- the region's biggest
economy -- contracting for the first time in five months in
April. A broader gauge of the wider 17-nation zone showed the
region still mired in recession.
Adding to concerns about Asia, growth in China's vast
factory sector dipped in April as new export orders shrank,
suggesting the world's second-largest economy still faces
formidable global headwinds into the second quarter.
These reports also helped the yen move higher and drove the
commodity-linked Australian dollar to a six-week low against the
U.S. dollar.
"Given the deteriorating fundamentals in the euro zone, the
prospect of (an ECB rate cut) has certainly increased," said
Boris Schlossberg, managing director of FX strategy at BK Asset
Management in New York. "A rate cut would be the quickest and
least expensive policy course."
Among top gainers on Wall Street, shares of Netflix Inc (NasdaqGS: NFLX - news)
rallied 23 percent to $214.90, after the video
subscription service reported solid subscriber growth and
better-than-expected profits in the first quarter.
The Dow Jones industrial average was up 142.96
points, or 0.98 percent, at 14,710.13. The Standard & Poor's 500
Index was up 15.96 points, or 1.02 percent, at 1,578.46.
The Nasdaq Composite Index was up 39.00 points, or 1.21
percent, at 3,272.56.
The CBOE Volatility index, a measure of investor
anxiety, fell 6.3 percent, though it was coming off a jump of 24
percent last week.
"Equity gains have been getting progressively smaller, so it
doesn't really feel like a robust rotation into the market at
this stage," said Jeff Morris, head of U.S. equities at Standard
Life Investments in Boston.
Europe's top share index closed up 2.4 percent, the biggest
daily rise since early August, buoyed by strong earnings and the
expectations of a rate cut by the European Central Bank. The
FTSEurofirst 300 provisionally finished at 1,182.49
points.
In Treasuries, the benchmark 10-year U.S. Treasury note
was down 3/32 in price, with the yield at 1.7048
percent.
CHINA FEARS
The economic headwinds from China earlier hit Asian shares,
driving MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside
Japan down 0.4 percent. Chinese shares posted
their worst daily loss in nearly a month.
MSCI's world equity index, which is heavily
weighted toward U.S. shares, was up 1 percent.
Adding to concerns about growth in Asia, the flash HSBC (LSE: HSBA.L - news)
Purchasing Managers' Index for China in April fell to 50.5 in
April from 51.6 in March. The reading was still stronger than
February's reading of 50.4.
The HSBC report on China, its first economic indicator for
the second quarter following weaker-than-expected growth in
first-quarter gross domestic product, weighed heavily on
commodity markets worried about the outlook for future demand.
Brent crude oil fell toward $99 a barrel on concerns about
the outlook for fuel demand.
June Brent crude was down $1.22 to $99.17 a barrel
while U.S. crude for June delivery was down $1.10 at
$88.09.
Gold fell around 1 percent on Tuesday after the outflow from
the biggest gold exchange-traded fund accelerated, investors
shifted toward other assets like equities, and the stronger
dollar put pressure on prices.
Gold fell 1.4 percent to a session low of $1,405.44
an ounce and was seen at $1,408.81 by 1445 GMT, still down 1.1
percent. Gold has dropped around 15 percent this year.
