* Chinese numbers add to upbeat factory data in Europe, U.S.
* Some U.S. policymakers expect higher growth and inflation
* Uncertainty persists over U.S. monetary policy - analysts
* Dollar falls on stronger yuan, still near 14-year highs
(Adds quotes, updates prices)
By Abhinav Ramnarayan
LONDON, Jan 5 World stocks hit their highest
level since mid-2015 on Thursday after strong Chinese data added
to the optimism about global growth and inflation that has been
driving markets since the start of the new year.
Growth in China's services sector accelerated to a 17-month
high in December, a private sector survey showed, adding to
upbeat factory and service sector surveys out of the United
States, Europe and Asia released this week.
In addition, minutes from the U.S. Federal Reserve's
December meeting showed that many of the central bank's policy
makers are expecting a pick-up in economic growth and inflation
in the world's biggest economy as a result of fiscal, regulatory
or other policies.
The MSCI world equity index, which tracks
shares in 46 countries, was up 0.4 percent at one stage to hit
its highest level since July 2015. At that level it was up over
1.5 percent for the year so far.
The index was pushed up by Asian shares, which rose for the
eighth consecutive day on Thursday.
European shares held steady near recent highs.
"While I am always cautious about December data because of
seasonal factors, we certainly have seen across the board
positive PMI data in Japan, China and the UK as well this
morning," said Investec economist Victoria Clarke.
Britain's economy finished 2016 strongly, growing at the
fastest rate since mid-2015, an industry survey showed on
Stocks and bond yields have been rising ever since the
election of Republican Donald Trump as U.S. president on
expectations that fiscal stimulus will boost growth and
inflation. Trump's inauguration takes place on Jan. 20.
"There seems to be a continuation of the Trump momentum we
saw in December, and this promises to be the prevailing mood
until we get into the detail of what Trump will actually do and
the battles he may have with Congress," said Investec's Clarke.
The minutes of the U.S. Federal Reserve's December meeting
showed that policymakers were keen to emphasise the uncertainty
of the outlook even while anticipating better growth and
inflation for the U.S. economy.
"The FOMC's minutes to its Dec meeting released post
yesterday's European close could best be characterised as
perhaps tilted toward the hawkish side but tempered by a heavy
dose of uncertainty," said Rabobank strategist Richard McGuire.
"All the policymakers emphasised the uncertainty of the
outlook, reminding investors that the outlook is more nuanced
than the market seems to think," he said.
With just two weeks to go before Trump takes over, investors
and policymakers are waiting to see if his actions match his
rhetoric and if his policies will be approved by Republican
The dollar extended its losses on Thursday, falling 0.42
percent against a basket of six major currencies - though
still near the 14-year high hit on Tuesday - following losses
against the Chinese yuan.
China stepped into both its onshore and offshore yuan
markets to shore up the faltering yuan for a second day on
Wednesday, sparking speculation that it wants a firm grip on the
currency ahead of Trump's inauguration.
For Reuters new Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Saikat Chatterjee; Editing by Gareth