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Global shares rise

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China's GDP meets target

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Dollar regains ground, still set for weekly loss

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Trump inauguration in view

By Samuel Indyk

LONDON, Jan 17 (Reuters) - Global equities rose on

Friday, adding to weekly gains, as declining bond yields,

stronger than expected Chinese growth figures and upbeat

earnings supported riskier assets.

The U.S. dollar clawed back some of Thursday's steep

declines against major peers, the result of resurgent wagers on

a Federal Reserve interest rate cut by June. Treasury yields

fell to a two-week low.

In Europe, the pan-continental STOXX 600 index rose

0.7%, taking the weekly gain to 2.4%, its biggest one-week jump

since September.

Britain's FTSE 100 and Germany's DAX rose

to intraday records, up 1.4% and 1.1%, respectively.

Wall Street also firmed in early trade, with the S&P 500

gaining 0.9%, taking the weekly rise to 2.8%, fuelled by

strong bank earnings at the start of the new reporting season.

"Investors are enjoying the re-anchoring of the market

narrative to company fundamentals and away from the macro, with

earnings season so far proving robust," said Kyle Rodda, senior

financial market analyst at Capital.com.

On Friday, data showed China's economy grew 5% last year,

matching the government's target, but the 2025 outlook remains

uncertain as U.S. President-elect Donald Trump returns to the

White House.

"If China is starting to do a little better, that's

positive," said Lars Skovgaard, senior investment strategist at

Danske Bank.

In Asia, mainland Chinese blue chips and Hong

Kong's Hang Seng both rose 0.3%.

Japan's Nikkei sagged 0.3%, paring earlier losses of

more than 1%.

MSCI's broadest index of global shares rose

0.7%.

BOND YIELDS FALL AGAIN

The jump in global bond yields at the start of the year

remains on pause with benchmark yields in the U.S., Europe and

UK falling on Friday.

The 10-year U.S. Treasury yield fell as much as

three basis points to 4.566%, the lowest since Jan. 3, after Fed

Governor Christopher Waller said on Thursday three or four rate

cuts this year are still possible if U.S. economic data weakens.

Money market traders have moved to fully price in a rate cut

from the Fed at its June meeting. On Monday, markets had been no

longer fully pricing in one rate cut this year.

Softer than forecast core inflation data this week also

helped stall the rise in the U.S. 10-year yield, which has

dropped 17 basis points and is on track for its biggest weekly

fall since November.

Danske Bank's Skovgaard said the softer U.S. inflation data

should ease some worries about rising global bond yields.

"This has a positive impact on equities as well," Skovgaard

said.

"Yields moving higher in a rapid fashion is not good for

equities and tends to put a dampener on the more growthy areas

of the market."

The dollar index - which measures the currency

against a basket of six peers - edged up 0.3% to 109.31, but

remained 0.3% lower for the week, threatening to snap six

straight weeks of gains.

The euro was down 0.3% at $1.0277, while the

beleaguered pound lost 0.6% to $1.2172 after worse than

forecast British retail sales in December.

The yen lost 0.6% against the dollar but remained

higher for the week as comments from policymakers spurred a rise

in bets for a quarter-point rate hike next week from the Bank of

Japan.

Sources told Reuters that the BOJ was likely to keep a

hawkish policy pledge and raise rates next week.

In commodities, crude oil headed for a fourth consecutive

weekly advance as the latest U.S. sanctions on Russian energy

trade hit supply and pushed up spot prices and shipping rates,

although prices eased on Friday.

Brent crude futures fell 0.6% to $80.85 per barrel.

U.S. West Texas Intermediate crude futures fell 0.3% to

$78.44 a barrel.

Gold stood at $2,707, hovering close to Thursday's

high of $2,724.55, its strongest in more than a month.