GLOBAL MARKETS-Shares rally, retail surge drives silver to 8-year high

* Global stocks up 0.5%; S&P 500 futures rise 1.2%

* Retail crowd turns gaze on silver, jumps to 8-year high

* Oil up 1%; dollar index, Bund, T-bill yields steady

* Excess Money? https://tmsnrt.rs/2YpThUB

By Simon Jessop

LONDON, Feb 1 (Reuters) - Global shares bounced and silver
markets surged on Monday as retail investors expanded their
social media-fuelled battle with Wall Street to drive the
precious metal to an eight-year high.

Stock markets were roiled last week after a spike in retail
demand to buy the stocks most bet against by hedge funds drove
huge gains in companies such as GameStop Corp, and
prompted fresh concern that COVID-19 monetary and fiscal support
measures were fuelling a market bubble.

With chatrooms abuzz with talk that silver was the new
target, silver-exposed stocks, funds and coins jumped, helping
push spot silver up more than 11%, before gains were
trimmed and it last traded up around 9%.

The bullish spirit helped London-listed miners post strong
gains, including one of more than 19% for Fresnillo

After falling 3.6% last week - its biggest weekly fall in
three months - the MSCI All-Country World Index
rose 0.5% by midday, tracking overnight gains in Asia
.

Wall Street looked set for an even stronger bounce-back,
with futures for the S&P 500 and NASDAQ both up
around 1.2%. The VIX 'fear gauge' was down 7%.

While the retail battle versus Wall Street, coordinated over
online forums such as Reddit, created some systemic risks, the
bigger danger was in the tech sector, where some stocks had "eye
watering valuations", Deutsche Bank analyst Jim Reid said.

"Retail has in many parts driven such valuations in the last
10 months. If this pops the wider market will have bigger issues
than last week."

However, with corporate earnings still beating expectations
- around 82% of S&P 500 delivering a positive surprise -
Kristina Hooper, Chief Global Market Strategist at Invesco, said
investors should look through the recent volatility.

"We have to keep in mind that in general, stock market
fundamentals are solid."

Gold followed silver higher, up 0.8% to $1,859 an ounce
, while oil also tracked the gains in other commodities,
with both Brent crude and its U.S. peer up around
1%.

While the stock market tussle continued to grab the
headlines, analysts cautioned that the bigger concern was
economic momentum as coronavirus lockdowns bite.

Data overnight showed Chinese factory activity slowed in
January as restrictions took a toll in some regions. In the euro
zone, manufacturing growth remained resilient at the start of
the year but the pace waned from December.

British data showed an even greater struggle, with
manufacturers facing the twin headwinds of COVID-19 and
Britain's exit from the European Union.

While the coronavirus vaccine rollout globally remains slow,
with concern about whether they will work on new COVID strains,
Europe was also bolstered by news that it would receive a
further 9 million doses from AstraZeneca in the first quarter.

The safe-haven dollar edged higher during the morning
session in Europe, with the dollar index last at 90.876,
having bounced from a trough of 89.206 hit early in January.

The euro, meanwhile, extended earlier losses against the
dollar, down 0.5% to $1.2075, well off its recent peak at
$1.2349, while the pound gave up some of its early gains to
trade up 0.1% on the day at $1.3705..

With riskier markets bouncing, Italian government bond
yields fell 2-3 basis points across the curve.

German Bund yields, meanwhile, the benchmark for the euro
zone, remained anchored around -0.51% on Monday, tracking U.S.
Treasury yields that also remained unchanged..

(Additional reporting by Sujata Rao, Abhinav Ramnarayan and
Ritvik Carvalho; Editing by William Maclean and Mark Heinrich)