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World stocks near 6-week highs on trade optimism

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U.S. deal with UK is first since Trump's tariff pause

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U.S. officials to meet with Chinese negotiators on

Saturday

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Bitcoin leaps to highest since January; Brent crude up

almost 2%

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Chip shares rise in Japan, Taiwan; China stocks struggle

(Updates prices, comment)

By Nell Mackenzie

LONDON, May 9 (Reuters) - World stocks hovered near

their highest levels in six weeks on Friday after a U.S. trade

deal with Britain fueled guarded optimism for progress in tariff

talks with other countries.

India on Friday offered to slash its tariff gap with the

U.S. to less than 4% from nearly 13% now, in exchange for an

exemption from President Donald Trump's "current and potential"

tariff hikes, Reuters reports, as both nations move fast to

clinch a deal.

MSCI's broadest index of world shares gained

0.14%, and remains above levels seen before Trump's 'Liberation

Day' global tariff announcements. Germany's Dax stock index hit

a record high, while U.S. stock futures pointed to firm

gains on Wall Street

"The deal between the U.S. and UK was more style over

substance," said Kyle Rodda, a senior financial markets analyst

at Capital.com.

The "general terms" agreement leaves in place a 10% tariff

on goods imported from the UK but lowers prohibitive U.S. duties

on UK car exports. Britain agreed to lower its tariffs to 1.8%

from 5.1% and provide greater access to U.S. goods.

"However, it feeds the narrative that the U.S. is looking to

bang out rapid-fire trade deals and reduce tariffs - at the

margins - and other trade barriers," Rodda said.

Trump pushed back against seeing the UK deal as a template

for other negotiations, perhaps, including those due Saturday

when U.S. Treasury Secretary Scott Bessent and chief trade

negotiator Jamieson Greer will meet China's economic tsar He

Lifeng in Switzerland.

European stock markets were broadly higher, with the

pan-European STOXX 600 index up 0.5%.

An investor rush from safe assets such as government

bonds into riskier ones such as stocks might mean markets are

getting ahead of themselves on optimism, said James Rossiter,

head of global macro strategy at TD Securities.

"The trade deal isn't really a trade deal. It's an agreement

on a few narrow topics. Still, it shows there is a degree of

movement and that some tariffs could be mitigated," said

Rossiter. Even so, he added, "tariffs are not going away."

Reaction to the UK trade agreement and the optimistic trade

figures that emerged yesterday from China have pushed markets

higher temporarily, but "the fundamentals behind what markets

are seeing are not as robust," said Rossiter.

Outflows from U.S. stocks continued for a fourth straight

week in the week to Wednesday, BofA Global Research said in a

note on Friday, while investors bought international stocks, led

by inflows to Europe.

Safe haven German Bund prices fell on Friday, driving yields

6 basis points higher to 2.58%, as investors dropped their bonds

for assets with higher returns.

U.S. 10-year Treasury yields were up 1.3 bps at 4.39%

.

Bitcoin soared to the highest since January, when it hit

record highs.

Brent crude added almost 2% to $64 per barrel,

following Thursday's 2.8% rally. U.S. crude rallied 2% to

$61.17 per barrel, also building on the previous day's surge.

Standard Chartered's Geoffrey Kendrick no longer sees risk

sentiment as the main driver for bitcoin.

"It is now all about flows, and flows are coming in many

forms," said Kendrick, the bank's global head of digital assets

research, pointing to an influx of cash into bitcoin ETFs, as

well as buying by so-called whales.

Shares of crypto exchange Coinbase Global ( COIN ) rose over

5% on Thursday after it announced $2.9 bln deal to buy crypto

option exchange Deribit. Shares fell on Friday morning 1.1%

after a lower first quarter profit report.

The U.S. dollar index, which measures the currency

against six major peers, edged away yesterday's one-month peak

and was last down around 0.3%.

The euro rose from one-month troughs and was last

trading 0.2% firmer at $1.1251, and sterling gained

0.3% to $1.3281.

Mainland China blue chips closed down 0.2%, while

Hong Kong's Hang Seng ended 0.4% higher. Japan's Nikkei

soared 1.6% and Taiwan's equity benchmark

advanced 1.8%, with technology shares the strongest performing

sector.