* World stocks index near record high after Dow breaks 20,000
* Solid earnings, revitalised Trump trade boosts Wall Street
* USD subdued despite higher yields on protectionism woes
* Crude oil rebounds with dollar on defensive, gold drops
By Marc Jones
LONDON, Jan 26 (Reuters) - World stock markets climbed strongly on Thursday, with investors basking in the afterglow of a break past 20,000 points for Wall Street's record high Dow Jones index.
MSCI's 46-country All World index .MIWD00000PUS was within touching distance of its lifetime high as European stocks rose 0.5 percent .EU to their highest since Dec. 2015, completing a global loop after Asia's main bourses also saw a bumper session. .T
The 'Trump trade', based on hopes of U.S. stimulus reflating growth, would appear to be back on - egged on by some impressive corporate earnings, higher commodity prices and signals that global growth is finally finding some traction.
A curious outlier was the dollar .DXY which was wallowing near a seven-week low after losing its momentum this year and taking a dislike to Trump's more controversial plans such as building a wall on the border with Mexico. FRX/
There were no such concerns in bond markets. Ten-year U.S. Treasury yields US10YT=RR were back above 2.5 percent to their highest of 2017 so far and the equivalent German DE10YT=TWEB and French yields jumped to their highest levels in over a year.
"The reflation trades are being driven by two main things," said Neil Williams, chief economist at fund manager Hermes.
"Countries more willing to open the fiscal box and we are awaiting Mr Trump's long-awaited tax cuts in mid-year. And second is the prospect of ultra-loose monetary policy."
In commodities, crude oil prices also bounced as global sentiment lifted and the dollar weakened, which helps non-U.S. buyers of dollar-denominated raw materials. O/R
U.S. crude CLc1 was up 0.8 percent at $53.18 a barrel after losing the same amount the previous day. Brent added 0.8 percent to $55.53 a barrel LCOc1 , while cooper hit a two month high as a strike loomed at the world's biggest mine in Chile. STOP ME DOW
The Dow had been flirting with 20,000 points for weeks so it brought widespread cheer when it broke through. It only topped 19,000 in November and this was the second-shortest time on record for the index to jump 1,000 points.
Europe's cross-country European STOXX 600 index .STOXX was trading 0.6 percent higher by 0945 GMT at its highest since December 2015. Germany's DAX .GDAXI hit its highest since May 2015 and London's FTSE .FTSE was near an all-time record.
Milan also showed little sign of nerves after Italy's constitutional court on Wednesday opened the way for fresh elections in the country this year, potentially in the summer. shares .MIAPJ0000PUS had a good day too. Japan's Nikkei .N225 brushed aside a stronger yen to rise 1.7 percent, Hong Kong's Hang Seng .HSI climbed 1.3 percent and Shanghai .SSEC edged up ahead of a week-long Lunar New Year holiday.
"Today's excitement mainly comes from strong U.S. stocks overnight, but people are also positive about Japanese companies' earnings, especially machinery manufacturers," said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo.
Back in the currency markets, sterling hit a six-week high after solid GDP data but then turned jumpy. The dollar index .DXY , which tracks the greenback against six other top currencies, clawed back from its overnight lows to stand flat on the day.
"The problem that the greenback is having right now is two- fold - first Trump has been talking down the currency and second, his policies make foreign investors nervous," wrote Kathy Lien, managing director of FX strategy for BK Asset Management.
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