GLOBAL MARKETS-Stocks surge as rally enters year, dollar rebounds

(Adds U.S. market open, byline; changes dateline; previous
LONDON)
* Global equity markets boosted by China stimulus
* China manufacturing data adds to optimism
* Dollar recovers from six-month low
* Crude prices steady at start of 2020

By Herbert Lash
NEW YORK, Jan 2 (Reuters) - The dollar snapped a four-day
losing streak on Thursday and global equity markets jumped at
the start of 2020 with a shot of Chinese stimulus, ensuring last
year's record-breaking rally remained intact.
Gold climbed to a three-month peak while yields on U.S.
Treasuries and Germany's 10-year bond tumbled on optimism about
the world economy after positive Chinese manufacturing data.
News that China's central bank was freeing another 800
billion yuan ($115 billion) to prop up a slowing economy added
to optimism, already fueled by easing U.S.-Sino trade
tensions.
China's factory activity expanded at a slower clip in
December, pulling back from a three-year high the previous month
as new orders softened, but production continued to grow at a
solid pace and business confidence shot up. The Caixin/Markit Manufacturing Purchasing Managers' Index
for December eased to 51.5 from 51.8 in November, but it
remained above the 50-mark that separates expansion from
contraction for the fifth straight month.
"It still feels like this continuation of the surge that
happened toward year-end in 2019," said Ken Polcari, senior
market strategist at SlateStone Wealth LLC in Jupiter, Florida.
"You did have some good Chinese data that came out
overnight, a positive manufacturing PMI, which is very
expansionary and helping fuel the rally."
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.47%, while the pan-European STOXX 600 index .STOXX
rose 1.04%.
The double lift of Chinese news helped Europe's main markets
in London, .FTSE Frankfurt .GDAXI and Paris .FCHI jump
0.88% to 1.4%, outpacing overnight gains in Asia and setting
them on course for their best opening day of a year since 2013.
The number of Americans filing claims for jobless benefits
edged lower last week, a positive signal for the U.S. labor
market amid recent signs new claims may be trending slightly
higher. Initial claims for unemployment benefits decreased 2,000 to
a seasonally adjusted 222,000 for the week ended Dec. 28, the
Labor Department said. Economists polled by Reuters had expected
225,000 new claims last week.
On Wall Street, the Dow Jones Industrial Average .DJI rose
167.86 points, or 0.59%, to 28,706.3. The S&P 500 .SPX gained
10.87 points, or 0.34%, to 3,241.65 and the Nasdaq Composite
.IXIC added 59.60 points, or 0.66%, to 9,032.20.
Emerging market stocks rose 1.06% while MSCI's broadest
index of Asia-Pacific shares outside Japan .MIAPJ0000PUS
closed 0.88% higher.
China's blue-chip CSI300 index .CSI300 , one of the world's
best performers last year, rose 1.4%, reaching its highest since
Feb. 7, 2018. Hong Kong's Hang Seng .HSI added 1.25%. .SS
Alibaba Group Holding Ltd BABA.N rose 3.4% on news that
China's Ant Financial, an affiliate of the e-commerce giant, has
joined the race for a digital banking license in Singapore, the
company said in a statement. The dollar recovered from a six-month low after a downbeat
December left an index that tracks the greenback versus a basket
of six major trading currencies almost flat at the end of 2019.
The dollar index .DXY rose 0.3%, with the euro EUR= down
0.23% to $1.1184. The Japanese yen JPY= strengthened 0.36%
versus the greenback at 108.32 per dollar.
Sterling was on track for its biggest daily loss in two
weeks as euphoria after last month's UK election gave way to
anxiety over the risk of a no-deal Brexit at the end of 2020.
The pound GBP= was last trading at $1.3157, down 0.73% on
the day.
Benchmark 10-year notes US10YT=RR rose 12/32 in price to
yield 1.8683%.
Germany's 10-year bond yield DE10YT=RR briefly hit -0.16%
on optimism better U.S.-China trade relations will spur global
growth, denting safe-haven assets. The yield on the bund, a benchmark for European lending,
soon slid to -0.23%.
Oil prices steadied after early gains as signs of improving
U.S.-China trade relations eased demand concerns and rising
tensions in the Middle East provided support.
Brent crude futures LCOc1 rose 7 cents to $66.07 a barrel,
while U.S. West Texas Intermediate (WTI) crude CLc1 rose 8
cents to $61.14 a barrel.
Spot gold XAU= added 0.8% to $1,528.62 an ounce, having
notched a three-month high of $1,530.60 earlier in the session.

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