* World stocks flat; growth fears, bonds overshadow Q1 results
* U.S. 10-year yield just above 3 pct, highest since early 2014
* Higher U.S. yields lift dollar index to 3-1/2-mth high
* Euro stuck near 1-1/2-mth low, ECB policy meeting in focus
By Sujata Rao
LONDON, April 26 (Reuters) - World markets remained edgy on Thursday, with shares eking out gains amid concern over the global economic outlook and with U.S. bond yields at four-year highs after breaking above the psychologically significant 3 percent line this week.
Investors will be watching the European Central Bank later for clues on when it will signal an end-date for its 2.55 trillion euro ($3.2 trillion) asset-buying programme .
Equities enjoyed strong gains in South Korea, where electronics conglomerate and key tech bellwether Samsung posted record quarterly profits , while Japan’s Nikkei added 0.5 percent.
On Wednesday, the U.S. Dow Jones benchmark snapped a five-day losing streak thanks to more strong corporate earnings. While the Nasdaq tech index fell again, it could benefit from a strong after-market rise in Facebook which posted forecast-beating results.
Equity futures were tipping Nasdaq to open 0.4 percent higher while the other two indexes are seen only marginally higher.
But the momentum fizzed in Europe where shares flatlined near one-week lows, as a mixed set of earnings weighed, including a 79 percent profit drop at Deutsche Bank.
All that kept MSCI’s all-country equity index only marginally in the black after five straight days of losses .
Investors remain cautious even though company after company, especially in the United States, has posted record-shattering first quarter results. Instead, signs of ebbing economic growth momentum are preying on their minds, alongside higher global borrowing costs that could dent future earnings.
Oil’s 11 percent rise this year, on top of last year’s 18 percent jump, is adding to inflation fears.
“The music is still playing and we are still dancing, but we are reducing risk,” said Pau Morilla-Giner, chief investment officer at London & Capital.
“The worry is about an overheating, leading to a rise in inflation, higher interest rates which bring on a textbook recession.”
Ten-year Treasury yields, the reference rate for global borrowing, extended their yield surge. Having risen around 25 basis points since early-April, the yield is a whisker off the 3.041 percent mark that would be a new four-year high.
The yield has risen for six straight days - the longest upward run since September 2017, according to Reuters data.
That, alongside the rise in commodity prices has led companies such as Alphabet to warn of surging costs while heavy equipment maker, Caterpillar said its buoyant first-quarter earnings could be the “high water mark”.
While 81.2 percent of U.S. earnings have beaten consensus estimates and Thomson Reuters data projects first-quarter earnings growth at 22 percent, investors fear such warnings from other companies.
“We have been on a real high with corporate profitability so people got psyched up about those numbers getting even better,” said Peter Lowman, CIO of UK-based wealth manager Investment Quorum.
“But with Treasury yields rising, people are worrying we may be peaking on profits, or if GDP growth is peaking and we are now in a situation where markets are getting very nervous,” he said, noting the U.S. Federal Reserve appeared to be in no mood to brake its rate-hike programme.
The European Central Bank is expected to keep policy unchanged at its meeting ending on Thursday and will likely play down the recent softness in the euro economy.
Euro zone bond yields, swept up in the Treasury market momentum, inched down from multi-week highs before the meeting, and the euro firmed off eight-week lows against the dollar .
Money-market pricing suggests investors expect the ECB to deliver a rate hike by June 2019, having pushed back expectations from early next year.
Credit Agricole strategist Orlando Green said markets expected ECB President Mario Draghi to focus on the softer recent data and address concerns about euro strength and global trade tensions.
“The risk is that he is less dovish than expected,” Green added.
That could provide a lift to the euro which has sold off in recent days against the dollar to approach its March 1 level of $1.2154 — weakest since mid-January. It fetched $1.21775 before the ECB meeting.
Sweden’s central bank meanwhile remained dovish at a policy meeting, pushing the crown to the lowest versus the euro since late-2009.
In contrast, the dollar has powered higher in recent weeks to hit 3-1/2 month highs against a basket of G10 peers, supported by rising debt yields. Against the yen it traded this week at 109.490, its strongest since Feb. 8.
Reporting by Sujata Rao, additional reporting by Shinichi Saoshiro in Tokyo, Marc Jones and Dhara Ranasinghe in London Editing by Hugh Lawson