November 25, 2019 / 8:10 PM / 2 months ago

GLOBAL MARKETS-World share markets rally on revived trade hopes; dollar gains

(Adds oil, gold settlement prices)

* S&P 500, Nasdaq hit record highs

* Gold slides to 2-week low

* Euro pinned near 10-day lows on bleak outlook

By Herbert Lash

NEW YORK, Nov 25 (Reuters) - The dollar rose and global equity markets rallied on Monday, with the Nasdaq and S&P 500 hitting new highs, as revived hopes the United States and China could soon sign an interim deal to end their prolonged trade war lifted investor sentiment.

A burst of merger activity also lifted equities, with trade-sensitive miners in Europe and semiconductors on Wall Street climbing on reports suggesting the world's two largest economies were close to an initial trade deal.

European shares posted their best day in three weeks as France's LVMH agreed to buy luxury jeweler Tiffany & Co for $16.2 billion, and Swiss drugmaker Novartis agreed to a $9.7 billion acquisition of The Medicines Co.

In the United States, TD Ameritrade Holding Corp agreed to an all-stock deal valued at $26 billion.

The big driver of equity market gains were reports that an elusive "phase one" U.S.-Sino trade agreement was near.

"The market's really assuming that we get an initial deal," Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. "There's a lot of optimism, excessive optimism, but there is still some upside assuming that it does occur."

Corporate management has put on hold capital expenditures on property, plant and equipment because of uncertainty surrounding the deal, which has dragged on the industrial side of the economy, Ghriskey said.

"I don't see the market selling off when eventually we get a deal, but there's limited upside at that point," he said.

U.S. national security adviser Robert O'Brien said on Saturday that a trade pact was still possible by year's end, while Chinese state-backed tabloid Global Times said Beijing and Washington were "very close" to a "phase one" trade deal.

Adding to the positive mood was the weekend announcement that China would seek to improve protections for intellectual property rights, a sticking point in the talks.

MSCI's gauge of stocks across the globe gained 0.64% and its emerging markets index added 0.51%. The pan-European STOXX 600 index rose 1.0%.

Apple Inc, Microsoft Corp and , along with microchip stocks, drove U.S. stocks higher.

The Philadelphia Semiconductor index jumped 2.32% and was on pace for its best day in just over three weeks.

The Dow Jones Industrial Average rose 141.09 points, or 0.51%, to 28,016.71. The S&P 500 gained 18.52 points, or 0.60%, to 3,128.81 and the Nasdaq Composite added 100.81 points, or 1.18%, to 8,620.69.

Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan bounced 0.7% and Japan's Nikkei firmed 0.7%.

Gold fell for a fourth straight session, sliding to a two-week low, as investors' appetite for riskier assets increased on the renewed optimism over a trade deal.

U.S. gold futures settled down 0.5% at $1,456.90 an ounce.

Oil prices rose.

Brent crude futures gained 26 cents to settle at $63.63 a barrel and West Texas Intermediate (WTI) crude rose 24 cents to settle at $58.01 a barrel.

Core euro zone bond yields rose slightly, as positive trade developments trumped last week's weak euro zone data.

The German benchmark 10-year bond yield rose two basis points in early London trading before easing to trade almost flat on the day at -0.349%.

U.S. Treasury yields slid ahead of the Treasury Department's scheduled sale of $113 billion in coupon-bearing supply this week, and as investors focused on the likelihood that the United States and China will reach a trade deal.

Benchmark 10-year notes rose 3/32 in price to push their yield down to 1.7620%.

The dollar index rose 0.05%, with the euro down 0.12% to $1.1008. The Japanese yen weakened 0.29% versus the greenback at 108.96 per dollar.

Reporting by Ritvik Carvalho; additional reporting by Sagarika Jaisinghani and Lisa Pauline Mattackal in Bangalore and Wayne Cole in Sydney; Editing by Dan Grebler and Nick Zieminski

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