World stocks extended gains?

LONDON, July 28 (Reuters) - World stocks extended gains to fresh 9-month peaks on Tuesday while the dollar fell to a 2009 low after upbeat U.S. data and optimism over corporate earnings prompted investors to add risky assets.

U.S. stocks rose on Monday after data showed home sales surged in June, a sign that the domestic housing market -- which led the world's biggest economy into recession -- may have hit bottom and is starting to rebound. More housing data is due later.

"After yesterday's much better new home sales data and continued theme of better-than-expected news, we may well see traders taking the opinion that this rally has a few more legs to run yet," Jimmy Yates, head of equities at CMC markets, noted. MSCI world equity index rose 0.7 percent to its highest since October. The index is up 7.6 percent this month and has risen nearly 16 percent since January.

"The rally witnessed over the last two weeks could, in fact, imply that the market is getting ahead of itself and discounting a profit rebound, but we believe the underlying cyclical rally ultimately will be durable," Bob Doll, global chief investment officer at BlackRock, said in a note to clients.

"The risks are that inflation expectations put Treasury yields and borrowing rates higher before the recovery gains traction, and that improving consumer spending contracts again next year after the impact of fiscal stimulus."

The FTSEurofirst 300 index rose 0.7 percent, hitting its highest since November.

Deutsche Bank fell more than 5 percent after reporting a significant rise in loan provisions despite better-than-expected quarterly net profit.

According to Thomson Reuters data, out of 202 firms on the S&P 500 index, 156 -- or 77 percent -- beat earnings expectations.

Emerging stocks rose 1.1 percent.