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GLOBAL MARKETS-British data prompts global bond selloff; oil rises

Thu, 27th Oct 2016 19:21

* Yields on global benchmark bonds pushed higher

* U.S. dollar hits 7 1/2-yr peak vs Swedish crown

* U.S. stocks flat; Comcast drop offset by healthcare

* Oil rises on draw of crude, OPEC comments (Adds settled oil prices; adds bond yields also build on U.S.jobless claims)

By Hilary Russ

NEW YORK, Oct 27 (Reuters) - Strong growth data out ofBritain prompted the worst daily selloff in government bond formonths and pushed yields on the world's benchmark bonds higheron Thursday, as expectations eased for a Bank of Englandinterest rate cut.

In the United States, equity losses led by Comcast andconsumer discretionary stocks offset gains in the healthcaresector, while European stocks slid and the U.S. dollar advancedagainst the Swedish crown and Japanese yen.

Official data showed that Britain's economy slowed onlyslightly in the three months after it voted to exit the EuropeanUnion. It grew by 0.5 percent between July and September, atouch less than the second quarter's 0.7 percent, enough totemper fears about an immediate economic impact following theBrexit decision.

Britain's 10-year gilt was up 12 basis points toyield 1.27 percent, on track for its biggest daily rise sinceJune 2015.

German and U.S. equivalents roseto their highest since early June at 0.19 percent and 1.86percent, respectively. U.S. government yields were fueledfurther by upbeat jobless claims data, and were last at 1.85percent.

"The stronger (gross domestic data) print in the UK hasgiven further weight to speculation that the BoE will notprovide further stimulus any time soon," said Rabobankstrategist Richard McGuire.

In U.S. equity markets, investors took Qualcomm's deal to buy NXP Semiconductors for about $47billion as a sign of confidence, sending up shares of both.

Despite beating earnings estimates a day earlier, Comcast pulled the S&P and Nasdaq lower, paring some lossesafter falling as much as 2.7 percent following price target cutsfrom Barclays and Deutsche Bank.

The Dow Jones industrial average fell 11.82 points,or 0.06 percent, to 18,187.51, the S&P 500 lost 4.15points, or 0.19 percent, to 2,135.28 and the Nasdaq Composite dropped 29.66 points, or 0.56 percent, to5,220.61.

Interest-rate sensitive sectors also struggled as bondyields rose. The S&P real estate sector was down 2.5percent and on track for its worst decline in five weeks whileutilities shed 0.4 percent.

Europe's STOXX 600 slipped 0.01 percent, withdefensive sectors such as healthcare and utilities providing thebiggest boost to the index, underscoring investor caution.

The MSCI all-country world stock index wasdown 0.33 percent.

The U.S. dollar hit its highest in more than seven and ahalf years against the Swedish crown after dovish comments fromSweden's central bank, and a three-month high against the yen onexpectations for a December Federal Reserve rate hike.

The dollar extended gains during the day, last up 1.82percent against the Swedish crown at 9.0702 crowns, aftertouching 9.0890, its highest level since early March 2009.

Oil prices edged higher on a reported drop in U.S. crude oilinventories, and as commitments from Gulf OPEC members assuageddoubts in the market about cooperation from other producers.

U.S. crude settled up 1.10 percent, or 54 cents, at$49.72 a barrel, while Brent crude added 44 cents, or 84percent, to $50.40. (Additional reporting by William Schomberg, Costas Pitas,Abhinav Ramnarayan and John Geddie in London; GertrudeChavez-Dreyfuss, Chuck Mikolajczak, Sam Forgione and Ethan Louin New York; Editing by Bernadette Baum and Nick Zieminski)

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