* MSCI world index hits record
* China 2019, Q4 GDP growth in line with expectations
* Investors eye global growth after data and easing trade
tensions
* European shares up 0.7%
* Sterling down 0.4% after weak data fuels rate hike
expectations
* Casino loses 12% after profit forecast cut
* Wall Street futures up
(Updates price throughout, adds sterling fall, changes dateline
to LONDON from LONDON/SHANGHAI)
By Tom Wilson
LONDON, Jan 17 (Reuters) - World shares rose to record highs
on Friday, buoyed by Chinese growth figures that suggested the
world's second-biggest economy was stabilising.
Riskier assets were in demand worldwide as the Chinese
growth data, along with easing trade tensions with the United
States, sent the MSCI world equity index .MIWD00000PUS up 0.2%
and further into record territory.
China's economy grew 6% between October and December last
year. Anaemic domestic demand and the trade war with the United
States led to growth of 6.1% in 2019, the slowest in 29
years. But the data reinforced recent signs of an improvement in
Chinese business confidence as trade tensions eased after
Beijing and Washington signed an initial deal on Wednesday to
defuse their tariff war.
Investors were turning their attention to what many see as
improved prospects for growth across the world. European shares
.STOXX gained 0.9% by late morning, with Frankfurt GDAXI.
and Paris .FCHI up around 0.7%.
Shares in London .FTSE , sensitive to currency moves,
gained 0.9% after sterling GBP=D3 slipped on signs of economic
weakening that could prompt the Bank of England to cut interest
rates this month.
Wall Street futures EScv1 were also pointing up.
The Chinese data fuelled a rise in the Chinese yuan, which
touch a six-month high of 6.8660 to the dollar CNY=CFXS .
"Investors that were last year buying risky assets rather
defensively - not really removing their hedging - right now are
deploying cash," said Olivier Marciot, a portfolio manager at
Unigestion.
"A number of investors that were sitting on big piles of
cash are starting reallocating. People are unloading cash
positions into financial assets."
In France, however, protests against planned pension reforms
started to hit major retailers. Supermarket Casino CASP.PA
slumped as much as 12% after slashing its forecast for 2019
operating profit growth because of the damage from transport
strikes in the fourth quarter.
Asian markets also rose after the Chinese data, with MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS gaining 0.3%.
China's own blue-chip index .CSI300 ended 0.1% higher,
down from an earlier rise of as much as 0.7%. The index has
rallied more than 8.5% since the beginning of December, fuelled
by hopes for improved trade relations with the United States.
Shares in Australia .AXJO and South Korea .KS11 both
rose, with Japan's Nikkei .N225 climbing to a 15-month high.
"This is all good news and positive for the China story,"
said Daniel Gerard, senior multi-asset strategist at State
Street Global Markets in Hong Kong.
MAINTAIN MOMENTUM?
Still, analysts say global equities may find it difficult to
maintain momentum as optimism over the trade truce gives way to
uncertainty over the next steps in trade talks.
While the Phase 1 deal signed on Wednesday may defuse the
18-month trade row, analysts said it was unlikely to ease
broader friction between the two countries.
Most of the tariffs imposed during the dispute remain in
place and a number of issues that sparked the conflict are still
unresolved. "The challenge from here is how long we can maintain these
improvements," said Steven Daghlian, market analyst at CommSec
in Sydney.
In currency markets, sterling was last down 0.4% at $1.3020
GBP=D3 as investors priced in a higher chance of an interest
rate cut after weak retail sales data.
Data this week suggesting weakness in inflation, growth and
production numbers has raised the likelihood of a 25 basis point
cut to rates in January to nearly 70%, according to Refinitiv
data.
The dollar held steady, reaching eight-month highs against
the yen JPY= after upbeat earnings from Morgan Stanley, rising
U.S. retail sales, a strong labour market and robust
manufacturing data had on Thursday helped to lift Wall Street to
record highs. .N
Google's parent, Alphabet GOOGL.O , became the fourth U.S.
company to top a market value of more than $1 trillion. Its
shares were up nearly 17% over the last three months.
The index .DXY that tracks the dollar against a basket of
six major rivals was last up 0.2 at 97.488.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/
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