Global stocks extend gains; UK data hits pound

By Natsuko Waki

LONDON (Reuters) - World stocks rose on Tuesday towards last week's four-month peak after rallies in Asia and Wall Street, while sterling fell after weak housing and retail sales data reinforced gloom about the UK economy.

A fall in oil prices from Monday's record peak and forecast-beating earnings from French bank Societe Generale (SOGN.PA: Quote, Profile, Research, Stock Buzz) brightened investor sentiment, while Chinese shares fell 1.8 percent after Monday's earthquake in southwest China where the death toll has reached nearly 10,000.

Technology shares were under spotlight after news Hewlett-Packard Co (HPQ.N: Quote, Profile, Research, Stock Buzz) is in talks to buy technology outsourcing company Electronic Data Systems Corp (EDS.N: Quote, Profile, Research, Stock Buzz) for $12-13 billion.

Since the start of the new quarter in April, investors have grown sanguine that the credit crisis since August is not damaging corporate profits and activity and banks are making progress in cleaning up their balance sheets.

"The market does have a much firmer tone to it. It doesn't want to give up an awful lot of ground," said Mike Lenhoff, chief strategist at Brewin Dolphin.

"The crisis aspect of the credit crisis seems to be now something of the past and we're just soldiering on."

The FTSEurofirst 300 index rose 0.4 percent while MSCI main world equity index .MIWD00000PUS rose a third percent, approaching last week's four-month peak. Asian shares .MIAPJ0000PUS rose more than 1 percent.

Other analysts say corporate results appeared broadly positive but there could be trouble to come.