World stocks rose on Wednesday and the euro kept the previous day's sharp gains as strong earnings from both sides of the Atlantic shifted focus away from concerns about the euro zone debt crisis.

French bank BNP Paribas rose more than 3 percent after it took fewer bad debt provisions than expected in the fourth quarter, helping it beat forecasts. Wall Street rallied on Tuesday after a strong revenue report from drugmaker Merck & Co and a firmer regional manufacturing survey.

Gains in world stocks rekindled investor risk appetite which took a hit from concerns about the debt woes of Greece and other euro zone countries. European ministers told Greece on Tuesday it may need to take further steps to bring its debt under control and calm irrational financial markets.

There is a general positive buzz about markets following a triple-digit (company earnings) gain in the U.S., said Owen Ireland, analyst at ODL Securities.

Momentum appears to be back onto the upside, as traders gain confidence that the Greek situation can be resolved.

MSCI world equity index <.MIWD00000PUS> rose 0.8 percent while the FTSEurofirst 300 index <.FTEU3> gained nearly 1 percent.

According to Thomson Reuters data, quarterly earnings growth for S&P 500 firms for the fourth quarter stood at 211.3 percent. Of 76 percent of S&P 500 firms that have reported their results so far, 72 percent have beaten their expectations.

Our analysis suggests that the current period of weakness is corrective and not anything more severe, Bob Doll, global chief investment officer of equities for BlackRock, said in a note.

Looking ahead, the negatives for the market include the fact that there has been such a strong upturn since last spring (which suggests that at least some of the potential positive news has already been factored in) and ongoing deflationary threats, such as what is happening in Europe.

Emerging stocks <.MSCIEF> gained 1 percent.

U.S. crude oil rose 0.8 percent to $77.61 a barrel.

The Bund futures rose 12 ticks.

The euro held steady at $1.3763, having made its biggest one-day gain since July on Tuesday.

I see this euro rebound as a temporary break from its longer-term downward trend. But its corrective move up could continue until early next week, said Hideki Amikura, deputy general manager of the FX section at Nomura Trust bank in Tokyo.

The dollar <.DXY> was steady against a basket of major currencies, after hitting its strongest in almost two weeks earlier.

(Additional reporting by Atul Prakash; editing by Stephen Nisbet)

Merck & Co.