In This Article:
(Refiles to correct bullet on MSCI ACWI and time on U.S. payrolls)
* MSCI ACWI up by 0.1 percent, trade worries cap gains
* Dollar turns negative after hitting 3-week high
* Yuan gains after central bank says will keep ccy stable
* U.S. payrolls due at 1230 GMT
* Italian government worries hit bonds, bank stocks
By Ritvik Carvalho
LONDON, Aug 3 (Reuters) - World stocks climbed on Friday, driven by a combination of strong earnings and a rally in the technology sector after Apple became the world's first trillion dollar company, although worries over a global trade dispute kept a lid on gains.
Italy's bonds sold off for a second straight day and stocks in Italian banks also fell on signs of renewed government tensions in Rome.
After hitting a three-week high, the dollar retreated into negative territory, while the Chinese yuan jumped after China's central bank said it would keep the currency "basically stable". The bank also said it would take counter-cyclical measures to keep foreign exchange markets stable based on market conditions.
The MSCI All-Country World Index, which tracks shares in 47 countries, was up by 0.1 percent after the start of European trading, and set to break a four-week streak of gains.
While a tech-led rally on Wall Street overnight filtered through to Asian stock markets, gains were capped by the trade tensions. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.05 percent, though it was down over half a percent on the week.
The trade row between the world's top two economies intensified midweek after U.S. President Donald Trump raised pressure on China by proposing a higher 25 percent U.S. tariff on $200 billion worth of Chinese imports. Beijing vowed to retaliate.
Investors were also cautious before the July U.S. jobs report due later in the day. This will give a reading on the health of the world's largest economy, now in its second-longest expansion on record. Economists polled by Reuters expect 190,000 jobs were created in July.
Futures indicated a higher open on Wall Street.
"The stock market trend continues to be characterized by a struggle between trade war distress, growth risks and strong corporate Q2 reports," SEB strategists wrote in a note to clients.
According to Bespoke Investment Group, mentions of tariffs in S&P 500 company earnings reports for the second quarter have more than doubled from the first quarter of this year.
The euro, which hit its lowest since the end of June earlier in the day, reversed course to trade 0.1 percent higher as the dollar retreated.
Elsewhere in currencies, Britain's pound reversed course from two-week lows to turn higher on the day. It had earlier fallen after Bank of England Governor Mark Carney said there was an "uncomfortably high" risk of Britain leaving the European Union without a deal.