* European stocks follow Asian shares higher after BoJ
stimulus
* Italy, some U.S. states prepare for relaxing lockdown
* Oil tumbles again as storage runs out
* Italian yields drop after credit rating reprieve
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(Adds details, quote, chart)
By Tommy Wilkes
LONDON, April 27 (Reuters) - Stock markets rallied on Monday
as investors cheered news more countries were easing lockdowns
and the Bank of Japan expanded stimulus to cushion the impact of
the coronavirus, though the oil price took another tumble with
storage running out.
The Bank of Japan matched market speculation by pledging to
buy unlimited amounts of government bonds and sharply raising
purchases of corporate and commercial debt, the latest in a raft
of vast central bank stimulus announcements that have helped
propel a near 25% rally in global stock markets.
The Federal Reserve and the European Central Bank meet later
in the week. Analysts do not expect many new big announcements
but the ECB is predicted to increase the size of its bond buying
programme.
"It's central bank week and investor sentiment is on a firm
footing," said Stephen Gallo, European Head of FX Strategy at
BMO Capital Markets.
"This is purely a case of 'don't fight the central banks',"
he added.
The Euro STOXX 600 .STOXX rose 1.64%, following on from
decent gains on Asian markets. Germany's DAX .GDAXI rose
2.49%, France's CAC 40 .FCHI 1.88% and Britain's FTSE 100
.FTSE 1.45%.
Wall Street also looked set to open higher, with S&P futures
ESc1 0.95% ahead.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, rose 0.77%. The index is now up 25% from
its low on March 23, but is still more than 20% off the highs in
February, before panic over the virus triggered a market rout.
After more than a month of lockdowns, countries are
gradually moving to ease restrictions, believing the peak of the
virus infection rate has passed.
More U.S. states are preparing to ease curbs on commerce
despite health experts warning that there is still too little
testing in place, while European countries further eased their
restrictions. Italy's prime minister announced on Sunday that factories
and building sites could reopen from May 4 and family visits
would be permitted, as the country prepares a staged end to
Europe's longest lockdown. The British prime minister, by contrast, said on Monday it
was too risky for the country to relax its lockdown.
In a busy week for corporate earnings around 173 companies
in the S&P 500 will report, including Apple AAPL.O , Amazon
AMZN.O , Facebook FB.O , Microsoft MSFT.O , Caterpillar
CAT.N , Ford F.N , General Electric GE.N and Chevron
CVX.N .
Analysts expect a 15% decline in S&P 500 first-quarter
earnings, with profits for the energy sector estimated to have
slumped more than 60%, raising fears of debt defaults.
Many European companies are reporting too, and
better-than-expected earnings from Germany's Deutsche Bank
helped lift sentiment on Monday. The United States and European Union both release
first-quarter economic growth numbers this week, while the
influential U.S. ISM manufacturing survey is also due.
But not everyone thinks the current crop of data is as
relevant for markets, which have recently shrugged off huge
rises in jobless claims to focus on how quickly economies will
rebound as government-imposed lockdowns are lifted.
"I don't know why people pay so much attention to today's
data. We know it's all bad. The new information will come in the
summer," said Stephen Jen, co-founder of hedge fund Eurizon SLJ
Capital.
He said the "tug of war" between those predicting a sharp
V-shaped rebound and those expecting a slower recovery would not
begin in earnest until May's data gave a picture of how
economies were responding once lockdown measures have eased.
OIL DROPS, ITALY GETS REPRIEVE
Oil prices weakened sharply.
Crude prices have fallen in eight of the last nine weeks as
demand collapsed due to the pandemic and supply cuts failed to
keep up, leaving the world awash with oil and storage space
running out. O/R
U.S. crude CLc1 slid more than 17%, or $2.90 to $11.34,
while Brent crude LCOc1 futures slipped 4.76% to $20.42 a
barrel.
The gold price fell 0.61% to $1,717 per ounce XAU= as
investors shifted away from the safe-haven metal into riskier
assets. Italian government bond yields IT10YT=RR dropped between
13 and 17 basis points after S&P Global late on Friday left the
country's credit rating in investment grade territory.
Investors had feared the ratings agency would cut
heavily-indebted Italy to 'junk'. Benchmark German 10-year bond yields DE10YT=RR were little
changed, while U.S. Treasury yields rose US10YT=RR .
The U.S. dollar fell as the broader upbeat mood encouraged
investors to move back into other currencies.
The dollar index, which measures the greenback against a
basket of currencies, dropped 0.4% to a one-week low of 99.84
=USD .
The euro gained 0.4% to $1.0857 EUR= , while sterling
strengthened 0.4% GBP= and the Japanese yen firmed a similar
amount JPY= , hitting its strongest since April 15.
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MSCI world equity index https://tmsnrt.rs/2VUwVsE
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(Editing by Jan Harvey and Alex Richardson)