GLOBAL MARKETS-Stocks rise as investors cheer preliminary U.S.-China trade deal

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* European shares hit record high
* German, French manufacturing PMIs disappoint
* FTSE 100, sterling move higher in tandem

By Ritvik Carvalho
LONDON, Dec 16 (Reuters) - World stock markets rose on
Monday, trading a notch below a record high hit last week on the
back of a preliminary trade deal agreed between the United
States and China.
European shares built on the previous week's gains at the
open. In early deals, the pan-European STOXX 600 index was up by
1% and hit a record high. Germany's DAX .GDAXI rose 0.5%.
Britain's FTSE 100 index was up 1.14%, moving in tandem with
the pound which rose 0.4%. .EU GBP/
U.S. stock futures also pointed to stronger gains to start
the week, with the S&P 500 e-minis ESc1 up 0.3%.
U.S. Trade Representative Robert Lighthizer said on Sunday a
deal was "totally done", notwithstanding some needed revisions,
and would nearly double U.S. exports to China over the next two
years. The "phase one" agreement suspended a threatened round of
U.S. tariffs on a $160 billion list of Chinese imports that was
scheduled to take effect on Sunday. The United States also
agreed to halve the tariff rate, to 7.5%, on $120 billion worth
of Chinese goods.
The 17-month-old trade dispute between the world's two
largest economies has roiled financial markets and taken a toll
on world economic growth.
German private sector activity shrank for the fourth month
running in December as a downturn in manufacturing offset
services sector growth in Europe's largest economy, a survey
showed, although it was taken before news of the trade deal.

French business grew at a steady pace in December despite a
nationwide strike against pension reform, although activity in
the manufacturing sector came unexpectedly close to stagnating.
Positive sentiment helped push MSCI's All Country World
Index .MIAPJ0000PUS up 0.15%. The index, which tracks stocks
across 47 countries, hit an all-time high on Friday when the
trade deal was agreed.
"We may have reached the point of 'peak tariffs' and this
deal could be the start of a series of phased rollbacks, which
could unlock further upside for equity markets, driven by an
improvement in business confidence and a recovery in
investment," said Mark Haefele, chief investment officer, UBS
Global Wealth Management in a note to clients.
Earlier in Asia, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS to its highest level since
April 18. It was last up 0.13%.
Australia's S&P/ASX 200 .AXJO led the way as it jumped
1.63%, while shares in Taiwan .TWII added 0.22%.
Japan's Nikkei 225 .N225 succumbed to some profit-taking,
falling 0.29% after surging 2.55% to a 14-month closing high on
Friday.
Ryan Felsman, senior economist at CommSec in Sydney, said
the trade deal and the receding risk of a disorderly Brexit
after the British election produced a strong Conservative
majority provided support for sentiment in Australia.
A lower-than-expected Australian budget surplus due to a
sluggish economy has also "built expectations by markets for
further easing from the Reserve Bank (of Australia)," he said.
Chinese investors initially had a more tepid reaction to the
trade news, with the blue-chip CSI300 index .CSI300 struggling
to rise further after trade hopes fanned a near 2% rise on
Friday.
But after a lacklustre morning session, the CSI300 index
turned higher in the afternoon and was last up 0.3%, helped by
data showing the country's industrial output growth and retail
sales jumped more than expected in November. Felsman at CommSec said investors wanted more details and
the reduction in U.S. tariffs may have disappointed some looking
for more aggressive action.
"Certainly there were expectations perhaps that the rollback
would be more significant than just 50%," he said.
U.S. shares had struck a cautious note on Friday, paring
initial gains to end barely higher as weary investors awaited
signs of a concrete deal.
However, the news of a deal was still enough to send the S&P
500 .SPX to a record closing high of 3,168.8, up 0.01%. The
Nasdaq Composite .IXIC added 0.2% to end at 8,734.88, also a
record, and the Dow Jones Industrial Average .DJI rose 0.01%
to 28,135.38.
U.S. Treasury yields moved higher on Monday, reflecting a
more positive mood. Benchmark 10-year Treasury notes US10YT=RR
rose to 1.8452% compared with their U.S. close of 1.821% on
Friday, and the two-year yield US2YT=RR touched 1.6304%
compared with a U.S. close of 1.604%.
The dollar was slightly higher against the yen at 109.45
JPY= and the euro was up 0.13% at $1.1135.
The dollar index .DXY , which tracks the greenback against
a basket of six major rivals, was down 0.17% at 97.006.
Oil prices, which had risen on Friday following the deal,
climbed further on Monday. Brent crude rose 0.1% to $65.28 per
barrel, and U.S. West Texas Intermediate crude CLc1 was down
0.05% at $60.11 per barrel.
Spot gold prices XAU= were down 0.06% at $1,474.64 per
ounce. GOL/