* Shares flat as Apple earnings eclipse positive PMI data
* Chinese PMI improves from December, supporting commodities
* Apple's disappointing result to undermine U.S. stocks
* Yen extends weakness against dollar and euro
LONDON, Jan 24 (Reuters) - World shares and commodities struggled to make headway on Thursday despite news of a pickup in Chinese factory activity as a mixed picture on Europe's outlook and Apple's disappointing earnings made investors wary.
MSCI's world equity index hovered near a 20-month high but was unchanged on the day, while Europe's FTSE Eurofirst 300 index stayed within the 10-point range it has seen since nearing two-year highs at the start of the year.
"Equities are trading sideways, capped by mixed earnings and conflicting messages out of Europe," Matt Basi, senior sales trader at CMC Markets, said.
U.S. stock index futures pointed to a weak day ahead after Apple's revelation that revenues had missed forecasts for the third straight quarter saw its shares slide nearly 10 percent in after-hours trading on Wednesday.
Business surveys released on Thursday showed growth in Chinese manufacturing accelerated to a two-year high in January, and a buoyant Germany was leading the euro zone toward recovery but also revealed France was sliding back into recession.
Data to be reported later from the United States is expected to show factory activity there eased, after production hit a seven-month high in December.
For the euro zone as whole January's flash euro zone purchasing managers index (PMI) pointed to more weakness ahead for a region already mired in recession, but also fuelled hopes the downturn could end by the middle of the year.
The index, which has been below the 50 mark that separates growth from contraction in all but one of the last 17 months, jumped to 48.2 from December's 47.2, beating expectations for a more modest rise to 47.5.
"At this stage the trajectory counts more than the absolute level, and here the main story is that the pace of recession is clearly easing," said Marco Valli, chief euro zone economist at UniCredit.
However, analysts were drawn to the contrasting fortunes of Germany and France within the data, which showed German activity at its strongest levels for a year while the French PMI had fallen to its lowest level since March 2009.
"The current gap between the German and French composite PMI indices is unprecedented," said Ken Wattret, chief euro zone economist at BNP Paribas.
"The differences in the fiscal position, labour market and competitiveness, for example, are increasingly evident in the activity data."
The diverging fortunes of Europe's two biggest economies lifted German bond prices to a three-week high, a move supported by Spanish figures showing another record high unemployment rate and a rising tide of bad bank loans.
French bonds themselves were seemingly unaffected by the data, with the 10-year bond yield 2 basis points lower on the day at 2.11 percent..
Meanwhile investors in British stocks shrugged off worries about Europe and focused on the better Chinese data and its implications for mining companies, which sent London's FTSE 100 up by 0.35 percent at midday.
China's HSBC flash purchasing managers' index (PMI) rose to 51.9 in January to a two-year high, signalling a rebound in manufacturing activity and confirming a recovery in growth in the world's second-largest economy was on track.
The growing confidence in the pace of China's economic recovery boosted by the latest PMI data helped keep oil above $112 a barrel, copper broadly steady at $8,083 a tonne , while gold drifted down to $1,677.40 an ounce.
Market participants are also waiting for a U.S. Federal Reserve policy meeting next week, which could shed light on the future of its ultra-loose monetary policy.
"We have the FOMC (Federal Open Market Committee) and non-farm payrolls data, which could shake this market out of its technical trading doldrums," said a Singapore-based metals trader.
In the currency markets, the mixed euro zone PMI data left the region's common currency little changed against the dollar at $1.3325, to be not far from $1.3404, the 11-month high hit on Jan. 14.
"The euro dipped on French numbers and was up on the German data. On the whole there is positive sentiment for the euro but we need more hard data to lift euro above $1.34," said Niels Christensen, FX strategist at Nordea.
Analysts said an influential German Ifo survey due on Friday along with an announcement on how much of the loans taken by banks from the European Central Bank a year ago they plan to repay would sway the euro in the coming days.
The euro and the dollar did gain steadily against the yen because the Japanese currency continued to weaken from the pressure being applied by Prime Minister Shinzo Abe on the Bank of Japan to ease monetary policy.
Abe said on Thursday he expected the Bank of Japan to achieve a new 2 percent inflation goal, announced earlier this week, as soon as possible.
After the comments the dollar rose 1.15 percent to hit a high of 89.65 yen, pulling away from a one-week low of 88.06 yen hit the previous day, while the euro rose 1.25 percent to hit 119.44 yen..