GLOBAL MARKETS-Shares soar to record highs on global recovery hopes

* Nikkei hits 30-year high
* Hopes for vaccines, U.S. stimulus turbocharge sentiment
* Chinese telcos lose $5.6 bln in value after index drop
* Investors await U.S. non-farm payrolls data
* Dollar rises on recovery expectations
* 10-year Treasury yields hit highest since March

By Tom Arnold and Andrew Galbraith
LONDON/SHANGHAI, Jan 8 (Reuters) - Global shares rallied,
with Japan's Nikkei hitting a three-decade peak, while U.S.
Treasuries extended their steepest sell-off in months on Friday
as investors looked beyond rising coronavirus cases and
political unrest in the United States to focus on hopes for an
economic recovery later in the year.
Europe's Euro STOXX 600 .STOXX opened up 0.7%, with
Frankfurt's index .GDAXI up 0.8% after German industrial
output and exports rose in November. U.S. S&P 500 e-mini stock futures ESc1 also pointed to a
cheery open, rising 0.51%.
The upbeat mood came after Wall Street hit record highs on
Thursday, while bond prices fell as markets bet a new
Democratic-controlled U.S. government would lead to heavy
spending and borrowing to support the country's economic
recovery.
Investors were also awaiting U.S. non-farm payrolls data due
later in the day to gauge the jobs market's health.
"Investors are buying the end of an erratic Trump
administration and looking forward to something new, which is a
Biden presidency and the prospect of a significant spending
programme," said Francois Savary, chief investment officer at
Swiss wealth manager Prime Partners.
"People are going for cyclical names and this is driving the
market forward but there has to be care taken as this relies on
a rebound in the economy in the coming quarters."
The MSCI world equity index .MIWD00000PUS , which tracks
shares in almost 50 countries, rose 0.4%, extending its push
into record territory and set to close out its best week since
late November.
In Asia, South Korea's Kospi .KS11 led the way, charging
4% higher, its best daily showing in nearly seven months, while
the Nikkei .N225 added 2.36%, hitting its highest level since
August 1990. The dollar-denominated Nikkei share average rose
above its 1989 peak to a record high. Bucking the trend, Chinese blue-chip shares .CSI300 fell
0.3%, retreating from a 13-year high, after index providers MSCI
MSCI.N and FTSE Russell said they would cut three Chinese
telecom companies from their benchmarks after the close on
Friday in response to a U.S. investment ban. The announcements, which means global funds have one day to
adjust billions of dollars of passive investments, wiped a
combined $5.6 billion off the value of their Hong Kong-traded
shares on Friday.
Hong Kong's Hang Seng .HSI rose 1.1% despite reports that
the Trump administration was considering banning U.S. entities
from investing in an expanded list of Chinese companies in the
waning days of his presidency.
On Thursday, the Dow Jones Industrial Average .DJI rose
0.69%, the S&P 500 .SPX gained 1.48% and the Nasdaq Composite
.IXIC added 2.56% - with all three indexes finishing at record
closing highs.
The gains follow expectations that Democratic control of
both U.S. houses of Congress will help the party of
President-elect Joe Biden push through larger fiscal stimulus
and comes despite political unrest in Washington, DC.
U.S. government officials have begun weighing removing
President Donald Trump from office before Biden's inauguration
date of Jan. 20, after Trump supporters stormed the U.S. Capitol
building. Rising risk appetite weighed on bonds, with the benchmark
10-year bond yield scaling a fresh high since March. Ten-year
notes US10YT=RR yielded 1.1% on Friday, up from 1.017% on
Thursday.
The dollar held onto its gains helped by the rising yields.
The dollar index =USD gained 0.35% against a basket of
currencies to 90.121 with the euro EUR= down 0.45% to $1.2216.
"We're sure to see a synchronised global recovery in the
second half of this year," said ING analyst Carsten Brzeski.
"Right now, there's lots of concern about the virus and
noise surrounding the vaccine. But we need to take a slightly
longer view."
Cryptocurrency bitcoin BTC=BTSP fell about 2% to $38,733
after topping $40,000 for the first time on Thursday on high
demand from institutional and retail investors. Market watchers
have said a pullback is likely following its recent run-up.
In commodity markets, oil traders continued to focus on
Saudi Arabia's pledge to deepen production cuts. Brent crude LCOc1 was up 0.51% at $54.66 a barrel, near
11-month highs. U.S. West Texas Intermediate (WTI) CLc1 rose
0.45% to $51.06. Both benchmarks are on track for weekly gains
of more than 5%.
Spot gold XAU= dipped 1.3% to $1,888.46 per ounce as the
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