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By Herbert Lash
NEW YORK (Reuters) - World shares strode to four-month highs on Wednesday as hopes for a coronavirus vaccine offset rising U.S.-China tensions and also helped lift the euro and oil prices on improved sentiment.
Asian markets were choppy after more barbs between Beijing and Washington over Hong Kong, but European bourses rose almost 2% and Wall Street advanced as investors set aside concerns about the growing number of COVID cases.
An experimental vaccine produced by biotech start-up Moderna Inc <MRNA.O> showed it was safe and provoked immune responses in all 45 healthy volunteers, an early- stage trial showed on Tuesday.
A separate University of Oxford trial was also positive news, according to reports on Wednesday.
U.S. Treasury yields rose and the yield curve steepened, indicating a wider spread between long- and short-term interest rates, as the hopes for a vaccine boosted risk appetite and upbeat economic data released on Wednesday added to the optimism.
"The market is trading fairly 'risk on' on vaccine hopes," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. "It's largely COVID news driving the price action recently."
U.S. industrial production, manufacturing output and plant capacity rose more than expected in June, and there was a bigger- than-expected draw in U.S. crude and refined products last week as demand edges up.
Graphic: Industrial production - https://graphics.reuters.com/USA-STOCKS/xegpbmddovq/indprod.png
Adding to the enthusiasm, the Federal Reserve's Beige Book survey showed U.S. businesses saw an uptick in activity into the beginning of July as states eased restrictions to contain the pandemic.
Europe's broad FTSEurofirst 300 index <.FTEU3> rose 1.65%, as growth-sensitive sectors such as travel and leisure <.SXTP>, miners <.SXPP> and industrial companies <.SXNP> led gains.
Moderna surged to a record high after its experimental drug produced high levels of virus-killing antibodies, bolstering hopes it may prove effective in later stages of testing. Moderna shares rose 6.9%.
Goldman Sachs <GS.N> rose after reporting its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.
On Wall Street, the Dow Jones Industrial Average <.DJI> rose 0.85%, the S&P 500 <.SPX> gained 0.91%, and the Nasdaq Composite <.IXIC> added 0.59%.
Stocks that have benefited from widespread lockdowns, including Amazon.com Inc <AMZN.O> and Zoom Video Communications Inc <ZM.O>, slid, limiting Nasdaq's gains. Amazon posted losses for a third consecutive session.