Better-than-expected company results, improving French business confidence and a pick-up in UK retail sales offered some evidence on Thursday that stimulus spending was helping to ease the global economic downturn.

Data from France showed industry bosses were more optimistic about the prospects for their business than expected in July, and than at any time since November, though mainly because inventories hit rock bottom, rather than to meet rising demand.

It shows that the improvement in industry is linked to the process of destocking, which in the short term is in itself favored by the government's stimulus plan in one sector, cars, said Olivier Gasnier, economist at Societe Generale.

Hopes of a swift recovery from the worst financial crisis since the 1930s were also restrained by data showing international bank lending had dropped again in the first quarter and shrank by over $6 trillion in the year to the end of March.

Corporate earnings boosted markets, however, with Asian stocks hovering at nine-month highs, European shares at 6-1/2 month highs and the Nasdaq .IXIC overnight recording its longest string of rising sessions in nearly 13 years.

Some analysts cautioned that the upswing might not have much further to run, with share prices no longer looking so cheap and economic data still patchy.


Japan's exports to China, the United States and Europe, posted narrower annual declines. The overall value of Japan's exports fell an annual 35.7 percent in June, an improvement on the 40.9 percent decline in May.

U.S. jobs data is due later on Thursday, which will give clues to the state of the world's largest economy.

The key for the outlook is whether U.S. consumption will pick up, and when. Given the dire job conditions there, we can't expect it to happen soon, said Takeshi Minami, chief economist at Norinchukin Research Institute.

That might cap Chinese growth and therefore Japanese exports.


Better-than-expected earnings drove European shares up for a ninth consecutive session and helped oil prices hold above $65 a barrel. [ID:nLN726978]

Swiss bank Credit Suisse (CSGN.VX) beat forecasts, while drugmaker Roche ROGN.VX raised its earnings guidance despite missing forecasts with its first-half profit.

British sugar refiner Tate & Lyle (TATE.L) said its underlying pretax profit was ahead of its expectations, while telecoms and retail group Carphone Warehouse (CPW.L) said it met or just beat first-quarter revenue and customer growth forecasts.

It also said it was optimistic consumer markets would not suffer a fresh downturn, an outlook supported by new data showing British retail sales jumped at three times the rate analysts expected in June as hot weather and early summer discounts boosted clothing sales.

The UK's Office for National Statistic said sales volumes rose 1.2 percent last month, but economists promptly put the figures in context.

No one should take too much comfort from today's figures. Household retrenchment has a way to run yet, especially with unemployment rising, said Colin Ellis, European economist at Daiwa.

On Wednesday, U.S. companies including Boeing Co (BA.N), eBay Inc (EBAY.O) and PepsiCo Inc (PEP.N) also beat forecasts, adding to earlier solid results from Apple Inc (AAPL.O) and Starbucks Corp (SBUX.O) that boosted the Nasdaq for the 11th straight day.