World stocks rose on Thursday from the previous session's one-month low, helped by firmer commodities, while European currencies slipped as concerns grew that the region's economy might already be in recession. Oil rebounded above $116 a barrel after crude and gasoline stocks data raised supply concerns, lifting other commodities from gold to wheat and boosting resource-related shares even as the U.S. currency held near this week's six-month high.
Germany, France and the broader euro zone joined Japan to move half way into a recession — technically defined as two successive quarters of growth contraction — after their gross domestic product fell in the second quarter.
Data confirmed the view which investors have been increasingly pricing in that U.S. economic troubles are spreading to the rest of the world.
"The dramatic rally in the dollar, courtesy largely of the deteriorating outlook for economic growth outside of the U.S., has raised the issue of whether a lot of the bad news is now already in the price for the UK and the euro zone," noted Daragh Maher, deputy head of global FX strategy at Calyon.
The FTSEurofirst 300 index rose 0.8 percent while the MSCI main world equity index gained 0.3 percent.
U.S. stock futures rose 0.3 percent, pointing to a firmer open on Wall Street.
GROWTH VS INFLATION
The euro was down 0.15 percent at $1.4900 after the euro zone economy shrank 0.2 percent in the second quarter, recording its first ever contraction.
"You come out with a weak (GDP) number and you get shot. That's the way the market's working now," said David Bloom, head of global currency strategy at HSBC.
Inflation is just so yesterday. It's all about growth. That's the flavour."
Sterling had fallen as low as $1.8620 and remained near the previous session's 11-1/2 year low on the trade-weighted index after the Bank of England's dovish report on inflation and growth on Wednesday raised expectations of an interest rate cut this year.
The dollar was slightly firmer on the day against a basket of major currencies.
Emerging sovereign spreads tightened 1 basis points while emerging stocks rose 0.7 percent, having hit a one-year low on Wednesday.
The September Bund future fell 13 ticks.
U.S. light crude rose 0.15 percent to $116.16 a barrel — still $30 bellow its record peak in July.
Gold rose to $831.10 an ounce.
