GLOBAL MARKETS-Global markets buoyant as U.S. stimulus debate approaches

* MSCI world shares index up 0.4%
* GameStop's Frankfurt-listed shares down 36.5%
* Silver tumbles further from eight-year high
* Biden for negotiations with Republicans on stimulus
* Euro at seven-week lows on economic outlook

By Tom Arnold
LONDON Feb 2 (Reuters) - Global stock markets gained for a
second day on Tuesday, spurred by increased optimism about
economic stimulus and global recovery, while retail investors
retreated from GameStop and their new-found interest in silver.
Positive momentum from Asia carried through to Europe, with
the pan-European STOXX 600 .STOXX climbing 1.1%.
Initial European Union estimates showed the euro zone
economy contracted less than expected in the fourth quarter of
2020 but is heading for another, probably steeper decline, in
the first quarter of 2021. MSCI's world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.4% after posting its strongest
day in three months on Monday.
MSCI's gauge of Asia-Pacific stocks outside Japan
.MIAPJ0000PUS rose 1.4%. China's benchmark CSI300 Index
.CSI300 gained 1.5%, helped by easing concerns about tight
liquidity and declining cases of new coronavirus infections.
Japan's Nikkei 225 .N225 added 1%.
E-mini futures for the S&P 500 index ESc1 added 0.8%.
Markets were buoyant before negotiations Tuesday between
U.S. President Joe Biden and Republican senators on a new COVID
support bill. The GOP's $618 billion stimulus plan released
early Monday was about a third the size of the President's
proposal. Top Democrats later on Monday filed a joint $1.9
trillion budget measure in a step toward bypassing Republicans.
"If you have the ability to have stimulus compromise, it's
going to be very supportive for financial assets in the medium
term as it means you will have the ability to have an economic
recovery," said Francois Savary, chief investment officer at
Swiss wealth manager Prime Partners.
"The $1.9 trillion was set as a high bar of the
possibilities and in a way to get into a negotiation to get
something that would be smaller and more efficient."
The dollar was near a seven-week high, benefiting from a
euro selloff after coronavirus lockdowns choked consumer
spending in Germany, and on short-covering in over-crowded
dollar-selling positions. The dollar index =USD eased by 0.1% to 90.9.
Against the dollar, the euro EUR=EBS was trading at
$1.2032, just above an early December low hit in the previous
session.
The Australian dollar pared gains after the country's
central bank said it would extend its quantitative easing
programme to buy an additional $100 billion of bonds. The Aussie
last stood at $0.7602 AUD=D4 , off the day's high of $0.7662.
With global market sentiment remaining upbeat about U.S.
fiscal stimulus, core euro zone government bond yields edged up,
with the benchmark German 10-year Bund yield < DE10YT=RR.>
around two basis points higher at -0.492%.
The 10-year U.S. Treasury US10YT=RR note added 3 basis
points to yield 1.1087%, its highest since Jan 22.
Institutional investors are still digesting the retail
trading frenzy that boosted GameStop Corp and other so-called
meme stocks in recent sessions against their financial
fundamentals, but they have made cautious moves to protect their
positions.
GameStop's Frankfurt-listed shares GMEa.F were down 36.5%
from Monday's close at 132 euros ($158.8) on Tuesday. The shares
closed in U.S. markets at $225. Spot silver prices XAG= slipped 5% to $27.53 per ounce, as
investors locked in profits after the precious metal touched a
near eight-year peak in the previous session, driven by retail
investors.
Spot gold XAU= fell 0.9% Tuesday to $1,841.96 per ounce.
Brent crude LCOc1 was up 2.3% at $57.65 a barrel. U.S.
crude CLc1 gained 2.35% to $54.82 a barrel after major crude
producers showed they were reining in output roughly in line
with their commitments. O/R

($1 = 0.8312 euros)

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
EURUSD and CESI https://tmsnrt.rs/3cFk5se
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