LONDON, July 15 European shares edged up and euro zone bond yields dipped on Tuesday as investors balanced accommodative signals on monetary policy against a pre-earnings season warning from the software industry.
Global stock markets have been supported by dovish policy measures from major central banks amid evidence of an economic recovery, though worries over the pace of growth in Europe and the health of the region's banks have weighed.
Markets also awaited German sentiment data for the region's latest economic snapshot. British June inflation data showed a greater-than-expected rise to hit its fastest rate since January, picking up from a 4-1/2-year low.
The pan-European FTSEurofirst 300 share index rose 0.1 percent, with benchmark indexes in Frankfurt, Paris and London trading flat to 0.3 percent higher, held back by a weaker technology sector as Germany's Software AG fell 15 percent after cutting forecasts.
The MSCI All-Country World index also edged up 0.1 percent, staying near record highs hit earlier this month.
German bund futures gained 0.1 percent and the U.S. dollar index rose against a basket of currencies including euro and yen after European Central Bank head Mario Draghi said a stronger euro exchange rate was a risk to the sustainability of the euro zone recovery.
Draghi said the ECB's Governing Council was unanimous on the use of unconventional measures if inflation stayed too low.
"With the ECB signalling that it will continue to maintain an easing bias, with the possibility of quantitative easing in coming months, peripheral (bond) spreads probably have scope to come further in," said Nick Stamenkovic, a bond strategist at RIA Capital Markets.
Italian and Spanish 10-year yields were 3 basis points down at 2.86 and 2.75 percent respectively, while Portugal's slipped 1 basis point and Greece's 3 basis points.
The Bank of Japan maintained its stimulus programme and stuck to a forecast that inflation will approach its 2 percent target next year, unfazed by recent data casting doubt on its scenario of an investment-led economic recovery.
"The BoJ have essentially backed off the idea of quantitative easing for now but are sending some cautious signals on growth," Simon Derrick, head of currency strategy at BNY Mellon, said. "Everything is stable and we are heading slowly and jerkily back towards higher inflation."
U.S. and Asian stocks gained ground, with the Dow Jones Industrial average hitting an intraday record on Monday, helped by Citigroup's better-than-expected earnings and more deals in the healthcare sector.
In Asia, Japan's Nikkei average rose 0.7 percent while South Korea's Kospi gained 1.0 percent. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 percent.
The MSCI Emerging Market index MSCI's benchmark emerging equity index inched up to a 16-month high.
Asian stock markets showed little reaction to stronger-than-expected new loan and money supply data for China. Chinese banks gave 1.08 trillion yuan ($173.90 billion) of new loans in June, beating expectations of 915 billion.
The data, coming ahead of GDP and other numbers from China due on Wednesday, underscored the perception that the Chinese economy is stabilising after a shaky start to the year but still needs more policy support to meet Beijing's growth target.
In the Middle East, Israel approved an Egyptian-proposed deal that would halt the week-old Gaza shelling war on Tuesday but the Palestinian territory's dominant Hamas Islamists said they had not been consulted by Cairo.
U.S. crude oil slipped to $100.72 and Brent crude futures edged down to $106.61. (Reporting by Lionel Laurent, editing by John Stonestreet)