GLOBAL MARKETS-Asia sets up global stocks for extended bull run on economic optimism

* MSCI ACWI has risen every single day so far in Feb
* Hong Kong shares hit 32 month high Nikkei up 0.5%,
* Oil rally fuelled by winter storm in Texas
* World FX rates http://tmsnrt.rs/2egbfVh

(Adds analyst commentary and Hong Kong open)
By Hideyuki Sano
TOKYO, Feb 16 (Reuters) - Asian shares advanced on Tuesday,
putting world equities on course to extend their bull run for a
12th consecutive session as optimism about the global economic
recovery and expectations of low interest rates drive
investments into riskier assets.
Oil prices soared to a 13-month high as a deep freeze due to
a severe snow storm in the United States not only boosted power
demand but also threatened oil production in Texas.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS ticked up 0.45% while Japan's Nikkei .N225
rose 0.4% to a 30-year high.
In Hong Kong, the Hang Seng Index .HSI surged 1.79% to hit
a 32-month high in its first trading session since Thursday
following the Lunar New Year holidays.
Mainland Chinese markets will remain closed for the holidays
until Thursday while Wall Street was also shut on Monday.
Ord Minnett advisor John Milroy said while share markets
were positive investors were becoming wary of the future risk of
inflation due to central bank and government stimulus programmes
in place around the world.
"There is a clear sense with rates staying low for some time
yet and investor appetite for equities staying strong we will
likely see markets hold up for some time yet," Milroy told
Reuters.
"Gaining traction is the thought that inflation could rise
much faster and sooner than the Fed is currently thinking. Then
if they do raise rates to combat it what happens to equity
markets and of course bond markets."
The bullish view on the economy lifted bond yields, with the
10-year U.S. Treasuries gaining 5 basis points to 1.245%
US10YT=RR in early Asian trade, its highest since late March.
Investors are looking to the minutes from the U.S. Federal
Reserve's January meeting, due to be published on Wednesday, for
confirmation of its commitment to maintain its dovish policy
stance over the near future. That in turn is set to keep a tab
on bond yields.
But some analysts say investors should keep a wary eye on
bond yields.
"If U.S. bond yields keep rising, that could start to
unsettle stocks," said Masahiro Ichikawa, chief strategist at
Sumitomo Mitsui DS Asset Management.
S&P500 futures ESc1 traded 0.65% higher to a record level
and MSCI's all country world index (ACWI), which has risen every
single day so far this month, ticked up slightly.
Successful rollouts of COVID-19 vaccines in many countries
are raising hopes of further recovery in economic activities
hampered by range of anti-virus curbs.
U.S. President Joe Biden is pushing ahead with his plan to
pump an extra $1.9 trillion in stimulus into the economy, in a
further boost to market sentiment.
Oil prices soared to their highest in about 13 months as a
U.S. winter storm added fuel to their rally on hopes of further
demand recovery.
U.S. crude futures CLc1 traded up 1.1% at $60.11 per
barrel.
Prices have rallied over recent weeks on tightening
supplies, largely due to production cuts from the Organization
of the Petroleum Exporting Countries (OPEC) and allied producers
in the wider OPEC+ group of producers.
Rising oil prices supported commodity-linked currencies such
as the Canadian dollar CAD=D4 while safe-haven currencies
including the U.S. dollar took a back seat.
The British pound held firm at $1.3910 GBP=D4 , staying at
its highest levels since April 2018.
The offshore Chinese yuan hit a 2-1/2-year high of 6.4010
per dollar overnight and last stood at 6.4030 CNH= .
MSCI's emerging market currency index .MIEM00000CUS hit a
record high as well.
The yen weakened to 105.36 per dollar JPY= , edging closer
to its four-month low of 105.765 set on Feb. 5. while the euro
was up 0.1% at $1.2142 EUR= .
In Asia, Bitcoin was trading at $48,088.28 BTC=BTSP , off
its record high of $49,715 hit on Sunday. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates YTD http://tmsnrt.rs/2egbfVh
Global asset performance http://tmsnrt.rs/2yaDPgn
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