GLOBAL MARKETS-Corporate results boost stocks, euro falls on inflation data

* Upbeat earnings activity boosts U.S., European shares

* Euro falls on below-forecast German inflation data

* Draghi cools ECB QE talk; Fed to begin policy meeting

* U.S. bond yields rise as Apple (NasdaqGS: AAPL - news) prepares huge bond deal

(Updates with U.S. markets, adds quote, changes dateline;

previous LONDON)

By Richard Leong

NEW YORK (Frankfurt: HX6.F - news) , April 29 (Reuters) - World stock indexes rose on

Tuesday on well-received corporate earnings, while the euro

slipped as weaker-than-expected German inflation data kept alive

chances of more stimulus from the European Central Bank.

Worries about Ukraine moved to the back burner, for now,

after the United States and European Union imposed more

sanctions on Russia for its role in backing the separatist

movement in eastern Ukraine.

Some relief that the West's broadened sanctions on Moscow

were limited led some investors to step back into stocks and

other risky assets and to pare their safe-haven holdings in gold

and U.S. and German government debt.

U.S. and German benchmark yields

rose to 2.71 percent and 1.51 percent, respectively. U.S. bond

yields were also under pressure on a huge bond offering from

iPhone maker Apple.

"The Ukraine situation played an important role here. The

tension there has been diffused for now. You have some decent

earnings in the U.S. and Europe as well," Robbert Van Batenburg,

director of market strategy at Newedge USA LLC in New York, said

of the gains in equities.

Upbeat news from Finnish telecom giant Nokia (Stockholm: NOKI-SEK.ST - news) and

German chipmaker Infineon (Xetra: 623100 - news) inspired European stock

markets, while encouraging results from U.S. drugmaker Merck (Dusseldorf: 6MK.DU - news)

and mobile provider Sprint (Frankfurt: 2S7.F - news) helped Wall Street open

higher.

The equity-friendly tone to markets on Tuesday was helped by

news Britain's that economy grew at a solid 0.8 percent pace in

the first quarter, giving an annual growth rate of 3.1 percent,

the fastest since 2007.

Private data showed U.S. home prices grew at a solid clip in

February, while Americans' confidence in the economy dipped in

April from the highest in more than six years set in March.

In early trading, the Dow Jones industrial average

rose 68.10 points, or 0.41 percent, at 16,516.84. The Standard &

Poor's 500 Index was up 4.85 points, or 0.26 percent, at

1,874.28. The Nasdaq Composite Index was up 4.54 points,

or 0.11 percent, at 4,078.94.

The FTSEurofirst 300 index of top European shares

gained 1 percent, while Tokyo's Nikkei earlier closed

down 1 percent.

With the gains in the U.S. and Europe, the MSCI (NYSE: MSCI - news) world equity

index, which tracks shares in 45 nations, rose

0.4 percent.

Investors also took cues from the mixed signals on whether

European central bankers will ease policy in the coming weeks

and months to fight off the threat of deflation.

ECB President Mario Draghi told German lawmakers on Monday

that further monetary easing in the form of bond-buying remains

some way off, and the ECB pumped more liquidity into the market

on Tuesday through its weekly money market operations.

German annual inflation accelerated 1.1 percent in April but

less than the 1.3 percent rise expected. A report due on

Wednesday is expected to show inflation in the euro bloc picking

up to 0.8 percent in April, but that would still be well below

the ECB's medium-term target of just below 2 percent.

"This will spark hopes the ECB will conduct another round of

unconventional policy. The ECB may not have a choice," Newedge's

Batenburg said.

Central bank purchases of bonds, such as those the Federal

Reserve has conducted and has begun to dial back, are aimed to

hold down long-term interest rates and bolster economic

activity. But they also erode the country's currency.

The euro was down 0.2 percent at $1.3821 and off

about 0.1 percent at 141.89 yen.

The dollar index, a measure of the greenback's value against

a basket of currencies, was little changed at 79.763.

As traders speculate on the ECB's next move, the Fed will

begin a two-day policy meeting on Tuesday, and is expected to

trim its bond-buying stimulus further.

In commodity markets, Brent crude was last up $1.09,

or up 1.01 percent, at $109.21 a barrel, and U.S. crude

was up $1.17, or up 1.16 percent, at $102.01 a barrel.

Spot gold prices rose $1.9 or 0.15 percent, to

$1,297.50 an ounce.

(Reporting by Richard Leong; additional reporting by Jamie

McGeever, Marius Zaharia and Tricia Wright; Editing by Alison

Williams and Dan Grebler)