GLOBAL MARKETS-Stocks firm near record as easing U.S. inflation fears lift Wall Street

By Kevin Buckland
April 9 (Reuters) - Global stocks held firm near record
highs on Friday as receding inflation fears in the United States
pushed down bond yields and lifted Wall Street, though softness
in Chinese shares capped gains in Asia.
MSCI's broadest gauge of world stocks .MIWD00000PUS set a
record high earlier in the Asian session and last stood almost
flat.
Japan's Topix .TOPX gained 0.6% and Australian stocks
.AXJO hovered near a more than one-year top, while South
Korea's Kospi .KS11 touched the highest intraday level since
mid-February.
Chinese shares were an outlier, with the CSI 300 .CSI300
sliding 1.3%, pushing down MSCI's ex-Japan Asia index
.MIAPJ0000PUS 0.4%, not helped by worries about further
tension between Washington and Beijing.
Benchmark 10-year Treasury yields US10YT=RR held close to
Thursday's two-week trough near 1.6%, which had lifted U.S. tech
shares and powered the S&P 500 to a record close.
Yields had surged to the highest since January of last year
at 1.776% at the end of March as a string of strong U.S.
economic data stoked concern for a spike in inflation that could
force the Federal Reserve to raise interest rates sooner than
policymakers had so far signalled.
However, an unexpected rise in the number of Americans
filing new claims for unemployment benefits coupled with Fed
Chair Jerome Powell's reiteration on Thursday that inflation was
not a worry helped calm bond market jitters.
"Markets appear to have taken some comfort that they may
have overdone the concerns around inflation, and therefore
around rising interest rates," said Michael McCarthy, chief
markets strategist at CMC Markets.
"At the moment, there's no doubt that sentiment is wildly
positive, and I'm not going to stand in the way of this train."
Powell signalled at an International Monetary Fund event
that the central bank is nowhere near reducing support for the
U.S. economy, saying that while economic reopening could result
in higher prices temporarily, it will not constitute inflation.
Aided by the pullback in yields, traders piled into megacap
tech stocks such as Apple Inc AAPL.O , Microsoft Corp MSFT.O
and Amazon.com Inc AMZN.O , which were the main drivers of the
S&P 500.
The S&P 500 .SPX gained 0.42% to a record high, while the
Nasdaq Composite .IXIC added 1.03%.
Emini futures .EScv1 pointed to additional upside, rising
0.1% on Friday.
"The movement in the (stock) market was predicated on rates,"
said Thomas Hayes, chairman of Great Hill Capital. "As long as
rates stay compressed there's a bid for long duration earnings
power, which was embodied in the rally in tech."
The U.S. dollar index =USD , which tracks the greenback
against six rivals, held near Thursday's two-week low below 92,
weighed down by lower Treasury yields.
Spot gold XAU= eased to around $1,752 an ounce after
jumping to a more than one-month peak of $1,758.45 on Thursday.
Crude oil prices were little changed as Wall Street's rally
and the soft dollar offset concern over a big jump in U.S.
gasoline stocks. U.S. crude CLc1 rose 0.15% to $59.69 a barrel, while Brent
LCOc1 eased slightly to $63.16 a barrel.

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