GLOBAL MARKETS-Corporate news lifts stocks, tight money markets buoy euro

By Jamie McGeever

LONDON, April 29 (Reuters) - European stocks rose on

Tuesday, as optimism surrounding corporate earnings and merger

moves eclipsed the crisis in Ukraine, while rising euro zone

money market rates and strong German consumer confidence

supported the euro.

Sterling also rose as investors awaited what are expected to

be strong first quarter UK economic growth figures, a view

backed by comments on Tuesday from Bank of England governor Mark

Carney that the recovery was starting to broaden out.

Stock markets shrugged off a mixed session in Asia and

remarks made by European Central Bank president Mario Draghi to

German lawmakers that further monetary easing in the form of

bond-buying remains some way off.

But pressure on the ECB to act is mounting. Overnight money

market rates rose to their highs of the year as excess cash in

the financial system continued to fall thanks to banks paying

down cheap ECB loans taken out at the height of the crisis.

"Money market developments are putting more pressure on the

ECB. If rates don't come down, the ECB is bound to do

something," said Jan von Gerich, chief fixed income strategist

at Nordea in Helsinki.

Overnight money rates in the euro zone nudged 0.4 percent,

well above the ECB's benchmark interest rate of 0.25 percent.

This helped push the euro up 0.2 percent on the day to $1.3878

.

Sterling also rose 0.2 percent against the dollar to $1.6840

Draghi and other ECB officials have expressed concern in

recent weeks at the deflationary impact of a strong exchange

rate.

German inflation data later on Tuesday is expected to show

an increase in April, ahead of euro zone figures tomorrow which

are expected to rise to a still-low 0.8 percent from a

multi-year trough of 0.5 percent.

Equities drew support from the GfK (Frankfurt: GFK.F - news) index of German consumer

confidence holding at a multi-year high of 8.5 heading into May,

as well as earnings reports from Finnish telecom giant Nokia (Xetra: NOA3.DE - news)

and Germany's Deutsche Bank (Xetra: DBK.DE - news) .

Nokia (Stockholm: NOKI-SEK.ST - news) shares jumped 6 percent after it unveiled plans to

return $3.1 billion to shareholders via buybacks and extra

dividends, while Deutsche rose 2 percent after profit fell by

nearly a third in the first quarter but still managed to beat

forecasts.

At 0750 GMT the FTSE Eurofirst 300 index of leading European

shares was up 0.6 percent at 1344 points and Germany's

DAX was up almost 1 percent at 9530 points.

Britain's FTSE 100 index was up 0.5 percent at 6735

points, and France's CAC 40 up 0.2 percent at 4468

points.

In Asia, the MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares

outside Japan fell 0.2 percent.

U.S. stock futures pointed to a higher open of 0.2 percent

on Wall Street, with M&A fever in pharmaceuticals still the talk

of trading floors after Pfizer Inc (NYSE: PFE - news) said it approached

AstraZeneca Plc (NYSE: AZN - news) to reignite a potential $100

billion bid.

"We seem to reaching a number of M&A milestones, with signs

that the volume of large cap M&A deals is now reaching

pre-financial crisis levels," wrote Deutsche Bank strategists in

a note on Tuesday.

Political news from Ukraine continues to unnerve investors,

but not enough to divert their cash out of riskier assets like

stocks and into safer-haven government bonds.

The European Union said on Tuesday it imposed sanctions on

15 Russian political and military leaders, including a deputy

prime minister. This followed action from the United States

against Russian individuals and firms on Monday.

On the economic front, the Federal Reserve begins a two-day

policy meeting on Tuesday, which is expected to result in the

continued paring back of its bond-buying stimulus.

In commodity markets, Brent crude oil was up 0.5

percent at $108.64 a barrel, U.S. crude was up 0.4

percent at $101.22 a barrel and gold was down 0.5 percent at

$1,289.80 an ounce.

(Reporting by Jamie McGeever and Marius Zaharia; Editing by

John Stonestreet; To read Reuters Global Investing Blog click on

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