Robust quarterly earnings from Europe drove world stocks higher on Thursday, while the dollar hit a three-month low on the back of weak U.S. data and a downbeat assessment of the economy from the Federal Reserve.

Investors took heart from results for companies including Shell , Rolls Royce or BAE Systems while there were gains for French service group Capgemini and France Telecom , Europe's third largest telecom operator by market cap.

Global equities measured by MSCI All-Country World Index <.MIWD00000PUS> added 0.3 percent, and the Thomson Reuters global stock index <.TRXFLDGLPU> also put on 0.4 percent.

UBS raised European shares to neutral from underweight, citing compelling valuations, economic data and relief for the banks to boot.

The market is embracing decent corporate headline numbers, but there is still a lot for it to digest, said Henk Potts, equity strategist at Barclays Wealth.

Credit Agricole CIB said that 48 S&P 500 companies, or 10 percent of the index, that reported second quarter results on Wednesday had an average surprise in earnings at +3 percent versus +12 percent so far this earnings season and an average surprise in sales of -3 percent versus +3 percent so far.

The pan-European FTSEurofirst 300 <.FTEU3> advanced 0.5 percent, though Tokyo's Nikkei average <.N225> fell 0.6 percent after hitting a two-week closing high in the previous session.


Wednesday's weak U.S. durable goods figures, however, added to concerns about the outlook for the world's largest economy.

The Fed's Beige Book, a summary of national economic conditions, also showed activity was not as robust in a few districts and had lost steam in recent weeks.

California's declaration of a state of emergency over its finances also hurt the dollar, which fell 0.5 percent against a basket of currencies <.DXY>, hitting a near three-month low.

The euro rose 0.5 percent to $1.3057, reaching an 11-week high, and sterling gained 0.3 percent to $1.5638, close to a five-month maximum hit in European trade at $1.5656.

(Additional reporting by Naomi Tajitsu, Joanne Frearson and Will James; editing by Patrick Graham)