GLOBAL MARKETS-Shares set fresh records, lifted by U.S. housing data

(Adds close of U.S. markets)
* MSCI world index, key Wall Street indexes hit records
* Canada's S&P/TSX, Europe's STOXX at new highs
* China 2019, Q4 GDP growth in line with expectations
* U.S. housing starts at 13-year high, brighten outlook

By Herbert Lash
NEW YORK, Jan 17 (Reuters) - Key world equity indexes scaled
new highs on Friday, boosted by a surge in U.S. housing starts
to levels last seen in 2006, while the greenback rose to a
one-week high against the euro on expectations of solid economic
growth.
Optimism over corporate earnings and indications of
resilience in China's economy also lifted equities and pushed
government debt yields higher.
U.S. housing starts jumped 16.9% to a seasonally adjusted
annual rate of 1.608 million units in December, a 13-year high
that suggested the industry has recovered and can now help
further the longest U.S. economic expansion. MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.41% to a record close. It was the benchmark index's
fifth straight day of new highs, and the biggest weekly
percentage gain since September.
The resurgent U.S. economy, backed by an accommodative
Federal Reserve, is bringing investors off the sidelines back
into the market, said Brent Schutte, chief investment strategist
at Northwestern Mutual Wealth Management Co in Milwaukee. An
improving economy also is reducing the fear of being the last
person to invest before a recession, he said.
"Those people are now coming back into the market because
recession fears are diminishing," he said. "When you look out
there and you have a 10-year Treasury at 1.8% and you have the
economy turning around, where are you going to put your money?"
European shares touched a record high, as the broad
pan-European STOXX 600 index .STOXX rose 0.96%. The three main indexes on Wall Street also hit intra-day and
closing highs, while posting their biggest weekly gains since
August.
The Dow Jones Industrial Average .DJI rose 50.46 points,
or 0.17%, to 29,348.1. The S&P 500 .SPX gained 12.81 points,
or 0.39%, to 3,329.62, and the Nasdaq Composite .IXIC added
31.81 points, or 0.34%, to 9,388.94. The S&P/TSX composite index .GSPTSE in Canada closed at a
new high, while emerging market stocks rose 0.54%.
China stocks rose as investors cheered further signs of
resilience in the Chinese economy and the signing of the
China-U.S. trade deal.
China's economy grew 6% in the fourth quarter, which
reinforced signs of improving business confidence, though anemic
domestic demand and the trade war slowed the growth rate to 6.1%
in 2019, the slowest in 29 years. Both the blue-chip CSI300 index .CSI300 and the Shanghai
Composite Index .SSEC gained 0.1%. The safe-haven Japanese yen weakened. The dollar index .DXY rose 0.31%, with the euro EUR=
down 0.4% to $1.1091. The yen JPY= strengthened 0.01% versus
the greenback at 110.16 per dollar.
Oil prices edged higher on concerns that slower growth in
China could dent fuel demand.
Brent crude futures LCOc1 rose 23 cents to settle at
$64.85 a barrel. U.S. West Texas Intermediate futures CLc1
settled up 2 cents at $58.54 a barrel. Most euro zone bond yields were flat, with Germany's 10-year
yield falling to -0.25% DE10YT=RR , below two-week highs around
-0.17%. Benchmark 10-year notes US10YT=RR last fell 5/32 in price
to push their yield up to 1.825%. Longer-term yields may have risen because of Thursday's
announcement the U.S. Treasury will begin issuing a new 20-year
bond in coming months as it seeks to plug budget deficits
expected to top $1 trillion annually. U.S. gold futures GCv1 settled up 0.6% at $1,560.30 an
ounce.

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