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GLOBAL MARKETS-Trump tax cut talk, China data spur risk rally

(Updates to afternoon U.S. trading)

* Wall St rises to records, spurred by Trump economy hopes

* Strong Chinese trade data lifts Europe, Asia

* U.S. Treasury yields edge up on import data

* Oil up on widespread OPEC deal compliance

By Saqib Iqbal Ahmed

NEW YORK, Feb 10 (Reuters) - A key index of global equity markets rose to a 20-month high on Friday, with Wall Street shares hitting records for a second straight day, as investors continued to bask in the afterglow of U.S. President Donald Trump's promise of tax reform.

The dollar hovered near an 11-day high against a basket of major rivals, as Trump and Japanese Prime Minister Shinzo Abe opened two days of talks looking to cement a decades-old alliance.

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The MSCI's world index, which tracks shares in 46 countries, rose after evidence of Chinese growth lifted shares in Asia and Europe.

Strength on Wall Street boosted the index further and it was up 0.45 percent to the highest since May 2015.

Trump's promise of a "phenomenal" tax plan helped reignite a post-election rally in stocks, which had stalled in recent weeks on concerns over his protectionist stand and the lack of clarity on policy reforms.

"The market is saying, 'Thank you for coming back to the very core of the reasons we have accepted your agenda'," said Quincy Krosby, market strategist at Prudential Financial (NYSE: PJH - news) in Newark, New Jersey.

The Dow Jones Industrial Average rose 98.67 points, or 0.49 percent, to 20,271.07, the S&P 500 gained 8.63 points, or 0.37 percent, to 2,316.5 and the Nasdaq Composite added 18.36 points, or 0.32 percent, to 5,733.54.

The ongoing corporate earnings season added to the upbeat mood and Activision Blizzard (Frankfurt: A0Q4K4 - news) 's shares surged 18 percent to give the biggest boost to the S&P 500 and the Nasdaq (Frankfurt: 813516 - news) .

European shares edged higher, ending the week in positive territory thanks to corporate earnings and robust basic resources stocks.

Europe's broad FTSEurofirst 300 index closed up 0.15 percent at 1,448.70.

The U.S. dollar held its recent gains against a basket of major rivals as comments from Trump during a news conference with the Japanese Prime Minister did little to shake optimism that his administration would reform tax policy soon.

The dollar index, which measures the greenback against six major rivals, was up 0.14 percent to 100.79.

In bond markets, U.S. Treasury debt yields edged higher, boosted by solid monthly import price data as investors acted largely on technical data.

"For whatever reason, today you could basically see the tumbleweeds rolling through many markets," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott LLC in Philadelphia. "It's quiet out there."

Benchmark 10-year Treasury note yields was down 4/32 in price to yield 2.411 percent, up from a yield of 2.397, late on Thursday.

In commodities, oil prices rose after reports that OPEC members delivered more than 90 percent of the output cuts they pledged in a landmark deal that took effect in January.

Brent crude settled up $1.07, or 1.92 percent, at $56.70 a barrel, and U.S. crude settled up 86 cents, or 1.62 percent, at $53.86. (Additional reporting by Dion Rabouin in New York and Yashaswini Swamynathan in Bengaluru; Editing by Toby Chopra and Nick Zieminski)