GLOBAL MARKETS-Global shares jump on easing yields, China growth

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Global shares rise

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China's GDP meets target

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Dollar regains ground, still set for weekly loss

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Trump inauguration in view

By Samuel Indyk

LONDON, Jan 17 (Reuters) - Global equities rose on Friday, adding to weekly gains, as declining bond yields, stronger than expected Chinese growth figures and upbeat earnings supported riskier assets.

The U.S. dollar clawed back some of Thursday's steep declines against major peers, the result of resurgent wagers on a Federal Reserve interest rate cut by June. Treasury yields fell to a two-week low.

In Europe, the pan-continental STOXX 600 index rose 0.7%, taking the weekly gain to 2.4%, its biggest one-week jump since September.

Britain's FTSE 100 and Germany's DAX rose to intraday records, up 1.4% and 1.1%, respectively.

Wall Street also firmed in early trade, with the S&P 500 gaining 0.9%, taking the weekly rise to 2.8%, fuelled by strong bank earnings at the start of the new reporting season.

"Investors are enjoying the re-anchoring of the market narrative to company fundamentals and away from the macro, with earnings season so far proving robust," said Kyle Rodda, senior financial market analyst at Capital.com.

On Friday, data showed China's economy grew 5% last year, matching the government's target, but the 2025 outlook remains uncertain as U.S. President-elect Donald Trump returns to the White House.

"If China is starting to do a little better, that's positive," said Lars Skovgaard, senior investment strategist at Danske Bank.

In Asia, mainland Chinese blue chips and Hong Kong's Hang Seng both rose 0.3%.

Japan's Nikkei sagged 0.3%, paring earlier losses of more than 1%.

MSCI's broadest index of global shares rose 0.7%.

BOND YIELDS FALL AGAIN

The jump in global bond yields at the start of the year remains on pause with benchmark yields in the U.S., Europe and UK falling on Friday.

The 10-year U.S. Treasury yield fell as much as three basis points to 4.566%, the lowest since Jan. 3, after Fed Governor Christopher Waller said on Thursday three or four rate cuts this year are still possible if U.S. economic data weakens.

Money market traders have moved to fully price in a rate cut from the Fed at its June meeting. On Monday, markets had been no longer fully pricing in one rate cut this year.

Softer than forecast core inflation data this week also helped stall the rise in the U.S. 10-year yield, which has dropped 17 basis points and is on track for its biggest weekly fall since November.

Danske Bank's Skovgaard said the softer U.S. inflation data should ease some worries about rising global bond yields.

"This has a positive impact on equities as well," Skovgaard said.

"Yields moving higher in a rapid fashion is not good for equities and tends to put a dampener on the more growthy areas of the market."

The dollar index - which measures the currency against a basket of six peers - edged up 0.3% to 109.31, but remained 0.3% lower for the week, threatening to snap six straight weeks of gains.

The euro was down 0.3% at $1.0277, while the beleaguered pound lost 0.6% to $1.2172 after worse than forecast British retail sales in December.

The yen lost 0.6% against the dollar but remained higher for the week as comments from policymakers spurred a rise in bets for a quarter-point rate hike next week from the Bank of Japan.

Sources told Reuters that the BOJ was likely to keep a hawkish policy pledge and raise rates next week.

In commodities, crude oil headed for a fourth consecutive weekly advance as the latest U.S. sanctions on Russian energy trade hit supply and pushed up spot prices and shipping rates, although prices eased on Friday.

Brent crude futures fell 0.6% to $80.85 per barrel. U.S. West Texas Intermediate crude futures fell 0.3% to $78.44 a barrel.

Gold stood at $2,707, hovering close to Thursday's high of $2,724.55, its strongest in more than a month. (Reporting by Samuel Indyk. Additional reporting by Kevin Buckland. Editing by Mark Potter)