GLOBAL MARKETS-Global stocks higher, sustained by bottomless stimulus


* Global stocks on nine-day winning streak

* Graphic: World FX rates

* Asian markets mostly flat amid multiple holidays

* Platinum scales six-year highs on car bets

* Italian bond yields near recent lows, eyes on government

* Treasuries rally on surprisingly soft CPI, dovish Powell

* Oil eases after longest winning streak in two years

By Tom Arnold

LONDON Feb 11 (Reuters) – Global shares rose for a ninth dayrunning on Thursday, just off record highs, as investorsdigested recent gains, while bulls were sustained by the promiseof more free money after a benign U.S. inflation report and adovish Federal Reserve outlook.

European stocks were higher, with the STOXX 600gaining 0.4% and London’s FTSE 100 up 0.1%. Thatfollowed a subdued Asian session as markets in China, Japan,South Korea and Taiwan were closed for holidays.

MSCI’s broadest index of Asia-Pacific shares outside Japanadded 0.2%, having already climbed for foursessions to gain more than 10% so far this year.

Investors were also reflecting on the first phone callbetween U.S. President Joe Biden and his Chinese counterpart, XiJinping, where Biden said a free and open Indo-Pacific was apriority and Xi warning confrontation would be a “disaster” forboth nations.

With Chinese markets closed, there was little reaction tonews the Biden administration will look at adding “new targetedrestrictions” on certain sensitive technology exports to Chinaand would maintain tariffs for now.

Futures for the S&P 500 were 0.3% higher, having hithistoric highs on Wednesday.

The MSCI world equity index, which tracksshares in 49 countries, was 0.1% higher. That was not far frompeaks reached the day before and just sustaining a nine-daystreak of gains, a first since October 2017.

“The story really is still U.S. equities first andforemost,” said James Athey, investment director at AberdeenStandard Investments. “Earnings season has been especiallystrong in the U.S., the fiscal stimulus coming from the Bidenadministration is getting bigger in the market’s mind and mostof the big winners from the pandemic are U.S. listed.

“Only the Fed can rock the boat and with yesterday’sdisappointing inflation print that prospect has just slippedeven further into the future.”

The outlook for more global stimulus got a boost overnightfrom a surprisingly soft reading on core U.S. inflation, whicheased to 1.4% in January.

Federal Reserve Chair Jerome Powell said he wanted to seeinflation reach 2% or more before even thinking of tapering thebank’s super-easy policies.

Notably, Powell emphasised that once pandemic effects werestripped out, unemployment was nearer 10% than the reported 6.3%and thus a long way from full employment.

As a result, Powell called for a “society-wide commitment”to reducing unemployment, which analysts saw as strong supportfor President Joe Biden $ 1.9 trillion stimulus package.

Westpac economist Elliot Clarke estimated over $ 5 trillionin cumulative stimulus, worth 23% of GDP, would be required torepair the damage done by the pandemic.

“Financial conditions are expected to remain highlysupportive of the U.S. economy and global financial markets in2021, and likely through 2022,” he said.

The mix of bottomless Fed funds and a tame inflation reportencouraged bond markets, leaving 10-year yields at 1.15%,down from a 1.20% high early in the week.

Italian bond yields remained near recent lows before along-term bond auction and as Mario Draghi was expected topresent his new government coalition in the next few days.Italy’s 10-year BTP, or government bond, yield wasdown one basis point down at 0.490%, near its lowest since earlyJanuary.

After the U.S. inflation report and the Fed’s Powellreiterating that rates could stay lower for longer, the dollarwas lower on the day at 90.391, away from a 10-week topof 91.600 touched late last week.

Gold was down 0.1% at $ 1,841.28 per ounce, as investorsdrove platinum to a six-year peak on bets of more demandfrom car makers.

Oil prices dipped, having enjoyed the longest winning streakin two years amid producer supply cuts and hopes vaccinerollouts will drive a recovery in demand.

Brent crude futures eased back 61 cents to $ 60.99.U.S. crude dipped 42 cents to $ 58.27 a barrel.

(Additional reporting by Wayne Cole in Sydney, David Henry inNew York; editing by Lincoln Feast, Sam Holmes, Larry King)