World stocks set to post biggest weekly drop since late-2016

LONDON, Feb 2 (Reuters): World stocks were set to post their biggest weekly drop since late 2016 today, as talk of central bank policy tightening and expectations of higher inflation boosted borrowing costs globally, a move that sparked a sell-off in shares.

The MSCI world equity index, which tracks shares in 47 countries, was down 0.3 percent. The index was set to snap its longest winning streak since 1999 - 10 weeks of gains - and record its biggest weekly loss since November 2016.

The yield on the 10-year U.S. Treasury jumped to more than 2.8 percent, its highest level since early 2014. That markedly steepened the yield curve and squeezed out investors who had feverishly bet on a tighter spread between longer-dated and short-dated yields.