GLOBAL MARKETS-Global stocks rally on economic recovery hopes

* European stocks 0.5% firmer
* DAX hits record high for 3rd time in a week
* China shares close to correction
* OECD hikes 2021 growth forecast to 5.6%
* U.S. Treasury yields fall

By Tom Arnold
LONDON, March 9 (Reuters) - Global stocks gained on Tuesday
as hopes of a robust economic recovery bolstered confidence in
riskier assets.
A pullback in U.S. and European bond yields also buoyed
equity markets.
In Europe, the Euro STOXX 600 .STOXX shrugged off data
showing a bigger than expected fall in fourth quarter euro zone
economic output to rally 0.5%. Germany's DAX .GDAXI leapt to its third record high in a
week after a surprise rise in January exports. The speedier rollout of COVID-19 vaccines in some countries
and the United States' planned $1.9 trillion stimulus package
helped underpin a brighter global economic outlook, the
Organisation for Economic Cooperation and Development said, as
it raised its 2021 growth forecast to 5.6%. "Conviction of a strong economic recovery is boosting risk
sentiment and driving demand for riskier assets such as
equities," said Sophie Griffiths, an OANDA market analyst.
"Yesterday's troubles of rising bond yields have been
quashed, for now, and the U.S. dollar is slipping lower."
Earlier, in volatile trading in Asia, China's benchmark
Shanghai Composite index .SSEC fell 1.8% to the brink of
correction territory amid fears of policy tightening. Japan's
Nikkei .N225 finished 1% higher as consumer goods companies
and property developers gained on expectations they would
benefit from an economic recovery.
NASDAQ futures rose 2.1% NQc1 and S&P 500 futures ESc1
0.9%.
MSCI's all-country index .MIWD00000PUS was 0.3% higher.
U.S. Treasury Secretary Janet Yellen said on Monday that
President Joe Biden's coronavirus aid package would provide
enough resources to fuel a "very strong" U.S. economic recovery,
and noted "there are tools" to deal with inflation. Still, investors remain conflicted over whether the stimulus
will help global growth rebound faster from the COVID-19
downturn or cause the world's biggest economy to overheat and
fuel inflation.
"The chance of our seeing more inflation in the economy is
meaningfully increased by the monetary policy actions and the
fiscal policy actions that we're seeing around the world,"
Goldman Sachs Chief Executive Officer David Solomon told a
conference in Sydney via webcast.
"There is certainly a reasonable outcome where inflation
accelerates more quickly than people are expecting, and that
will obviously have an impact on markets and volatility."
The technology sector and other richly valued companies have
been highly susceptible to the rising rates.
Australian tech stocks slid for the sixth straight session,
in line with their U.S. peers, while a tech sell off meant South
Korea's KOSPI .KS11 fell 0.7%, dipping for a fourth straight
session.
U.S. economic data pointed to a continued recovery.
Wholesale inventories increased in January despite a surge in
sales, the Commerce Department said on Monday, suggesting
inventory investment could again contribute to growth in the
first quarter. "If rates are grinding higher because people are getting
optimistic about what economic growth looks like, that is still
supportive for equity prices," said Tom Hainlin, global
investment strategist at U.S. Bank Wealth Management's Ascent
Private Wealth Group in Minneapolis.
Euro zone government bond yields fell across the board in
the wake of the gloomy fourth quarter economic data.
Germany's 10-year government bond yield DE10YT=RR dropped
4 basis points to -0.322%, moving further away from the one-year
high of -0.203% in late February. U.S. Treasuries rallied ahead of a key auction, with 10-year
yields US10YT=RR dropping by as much as 5 basis points on the
day.
In foreign exchange markets, the dollar index =USD backed
away from a three-and-a-half-month high and was 0.4% lower. In
signs risk appetite might be returning, the British pound, the
Aussie, and the Kiwi dollar all edged up. The euro EUR=D3 rose
half a percent to $1.19155.
Oil prices rose as investors focused on prospects for
tighter supply and demand recovery.
Brent crude LCOc1 was up 1.3% at $69.13. U.S. West Texas
Intermediate (WTI) CLc1 added 0.6% to $65.46. O/R
Spot gold XAU= added 1.4% to $1,704.46 an ounce.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>