Disappointing corporate earnings weighed on global stock markets on Thursday, pushing major indexes lower, while shifting interest rate expectations lifted the dollar and put Britain's pound on edge.

Investors were also cautious about a Bank of England meeting later in the day, wary in case it makes its first move to tighten policy since the start of the financial crisis.

After weeks of generally positive news on the corporate front, investors have suddenly been presented with a barrage of less than robust reports.

Strong corporate earnings and the expectations of more to come have been a major driver of equities in the past year, backed by an improving economic climate.

In Europe, major bank Credit Suisse missed profit expectations because of debt charges, and Diageo , the world's biggest spirits group, missed expectations with just a 9 percent rise in half-year earnings.

U.S. tech giant Cisco Systems Inc , meanwhile, reported quarterly results after the New York market close on Wednesday, beating profit and sales beat expectations but with disappointing margins.

Its stock fell nearly 10 percent in extended trading.

Most earnings themselves have been supportive, but if you look at the guidance and the impact of inflationary pressure, what is almost certain is that this will have an impact on profit margins, said Jeremy Batstone-Carr, strategist at Charles Stanley.

MSCI's all-country world index <.MIWD00000PUS> was down 0.6 percent, pressured in particularly by emerging markets. The EM sub-index lost 1.8 percent.

Europe's FTSEurofirst 300 <.FTEU3> was down 0.6 percent, even with an upward boost from Deutsche Boerse , which looks set to buy peer NYSE Euronext .

Earlier, Japan's Nikkei closed down 0.1 percent.

Most developed markets remain in the black for the year however, with U.S. indexes leading the way, reflecting a shift this year from emerging markets to developed ones.

DOLLAR RISES

The dollar rose more than half a percent against a basket of major currencies <.DXY>.

The euro was pressured by fading prospects for a European Central Bank rate rise and Britain's pound weakened ahead of the BoE meeting.

The euro was down 0.6 percent against the dollar at $1.3646 having risen to $1.3745 in U.S. trade on Wednesday.

It's difficult for now for the euro to rise above the peak it hit earlier this month. It will need a fresh factor to push it beyond that high, said Keiji Matsumoto, a strategist at Nikko Cordial Securities.

Financial markets see a one-in-five chance that the Bank of England will raise interest rates from their record low 0.5 percent later after what is likely to be its most finely balanced decision in years.

Inflation pressures are growing in Britain, but economic recovery is very fragile. The pound was down 0.2 percent at $1.606.

Pressure was also growing again on peripheral euro zone debt. The yield on 10-year Portuguese bonds climbed to its highest since the launch of the euro.

The cost of insuring against a default rose for Greek, Portuguese, Spanish and Irish bonds.

The mood raised demand for core euro zone debt.

(Additional reporting by Neal Armstrong and Brian Gorman; Editing by Toby Chopra)

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