(Adds U.S. market open, byline, dateline; previous LONDON)
- MSCI world index, Wall Street and Europe indexes hit records
- China 2019, Q4 GDP growth in line with expectations
- U.S. housing starts at 13-year high
Key world equity indexes scaled new highs on Friday as the latest U.S. data - a surge in housing starts to the highest level since 2006 - drove stocks on Wall Street to records and investors away from risk-adverse assets such as the yen.
Optimism over corporate earnings and indications of resilience in China's economy also lifted equities, led the dollar to gain further against the euro and pushed government debt yields higher.
Housing starts jumped 16.9% to a seasonally adjusted annual rate of 1.608 million units in December, a 13-year high suggesting the industry has recovered amid low mortgage rates that also can help support the longest U.S. economic expansion.
MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.21%, marking the index's fifth straight day of setting records.
The resurgent U.S. economy, backed by an accommodative Federal Reserve, is bringing people off the sidelines back into the market, said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management Co in Milwaukee.
An improving economy also is reducing the fear of being the last person to invest before a recession, Schutte said.
"Those people are now coming back into the market because recession fears are diminishing," he said. "When you look out there and you have a 10-year Treasury at 1.8% and you have the economy turning around, where are you going to put your money?"
European shares touched a record high, as the broad pan-European STOXX 600 index .STOXX rose 0.92%.
The three main indexes on Wall Street also hit records. The Dow Jones Industrial Average .DJI rose 8.47 points, or 0.03%, to 29,306.11. The S&P 500 .SPX gained 3.63 points, or 0.11%, to 3,320.44 and the Nasdaq Composite .IXIC dropped 5.50 points, or 0.06%, to 9,351.63.
Emerging market stocks rose 0.37%. China stocks rose as investors cheered further signs of resilience in the Chinese economy, with risk appetite also getting a boost from the signing of the Sino-U.S. trade deal.
China's economy grew 6% in the fourth quarter, though anemic domestic demand and the trade war slowed the growth rate to 6.1% in 2019, the slowest in 29 years.
The data reinforced recent signs of improving business confidence in China as expectations a Phase I trade deal would be reached became apparent late last year.
Both the blue-chip CSI300 index .CSI300 and the Shanghai Composite Index .SSEC gained 0.1%.
The safe-haven Japanese yen weakened as the record-setting rally in stocks showed stronger risk appetite.
The dollar index .DXY rose 0.31%, with the euro EUR= down 0.4% to $1.109. The yen JPY= weakened 0.01% versus the greenback at 110.18 per dollar.
Oil prices edged higher. Brent crude futures LCOc1 rose 28 cents at $64.90 a barrel. U.S. West Texas Intermediate futures CLc1 gained 17 cents to $58.69 a barrel.
Most other euro zone bond yields were flat, with Germany's 10-year yield falling to -0.25% DE10YT=RR , below two-week highs around -0.17%.
Benchmark 10-year notes US10YT=RR last fell 7/32 in price to push their yield up to 1.832%.
Longer-term yields also may have gotten a boost because of Thursday's announcement the U.S. Treasury will begin issuing a new 20-year bond in coming months as it seeks to plug budget deficits expected to top $1 trillion annually.
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