GLOBAL MARKETS-Stocks rise as U.S. retail trading frenzy comes under scrutiny

* World shares inch closer to record peak
* Yellen calls regulator meeting on GameStop volatility
* Italy yields fall on talk Draghi will become PM
* Silver rebounds, Brent crude prices at 11-month high

(Recasts, adds details, updates prices)
By Danilo Masoni
MILAN, Feb 3 (Reuters) - World shares rose on Wednesday as
volatility caused by a retail trading frenzy on Wall Street
subsided on expectations of tougher regulation, while optimism
about U.S. fiscal stimulus also supported sentiment.
The MSCI world equity index .MIWD00000PUS was up 0.3% by
0852 GMT, inching closer to its record peak following gains in
Asia overnight and a positive open in Europe.
World shares recovered from wild swings last week when a
Reddit-driven trading fever boosted heavily shorted stocks like
GameStop, forcing hedge funds to reduce their equity books.
Investors were bracing for tougher U.S. markets regulation
after Treasury Secretary Janet Yellen asked to discuss whether
trade had been consistent with fair and efficient markets.
Officials were set to meet as soon as Thursday
"Regulators have acknowledged the tumult," noted Deutsche
Bank strategists led by Jim Reid in a note.
Gamestop's GME.N Frankfurt-listed shares fell 45% in
morning trade in Europe.
Markets also cheered to renewed hopes for U.S. President Joe
Biden's proposed $1.9 trillion COVID-19 aid bill after the
Senate took steps to allow Democrats to pass Biden's package
without Republican support.
Well-received earnings updates from tech giants Alphabet (NASDAQ:GOOGL)
GOOG.O and Amazon.com AMZN.O also bolstered sentiment.
Nasdaq NQc1 and S&P 500 ESc futures were up 0.8 and 0.4%
respectively.
On bond markets, Italy's borrowing costs fell sharply on
expectations former European Central Bank chief Mario Draghi
could become the country's next prime minister, ending a
political crisis. Italy's 10-year bond yield fell as much as 8 basis points to
around 0.58% IT10YT=RR , its lowest in almost two weeks. It was
set for its biggest one-day fall since mid-January.
The gap between Italian and German 10-year bond yields
narrowed to 105.9 bps from 113 bps late on Tuesday
DE10IT10=RR .
"While significant policy initiatives seem unlikely, markets
will probably view Draghi as a positive appointment," said Paul
Donovan, chief economist at UBS Global Wealth Management.
Elsewhere, spot silver XAG= , which briefly surged on
Monday as small traders bought up the metal, rose 0.7% to $26.8
an ounce. That was a minor rebound from an 8% tumble on Tuesday,
and analysts say the retail trader-driven rally to a near
eight-year peak in the previous session has faded.
Spot gold XAU= fell 0.1% to $1,835.5 per ounce.
Oil prices continued their upswing, supported by an
unexpected draw in U.S. crude stockpiles and a producer estimate
of a global oil market deficit this year.
Brent crude futures LCOc1 hit an 11-month high and were
last up 0.7% at $57.86 a barrel, while U.S. crude futures CLc1
climbed 0.5% to $55.06 a barrel, just shy of a one-year high.
In foreign exchange markets, the dollar traded near a
two-month high against the euro EUR=D3 as investors bet that
the U.S. economy will recover from the coronavirus shock faster
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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