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(Changes date line to London, updates throughout)By Naomi RovnickLONDON, Feb 22 (Reuters) -Global shares traded around their lowest levels in more than a month on Wednesday and U.S. Treasury yields stuck to around their highest since November, as fresh fears about inflation and interest rates weighed on market sentiment.MSCI’s broad index of global shares fell 0.4% to head for its lowest since Jan. 20, while the index’s broad gauge of Asia-Pacific shares outside Japan fell 1.3% to its lowest since Jan. 6.Europe’s STOXX 600 share index fell 0.4% in early trade. Wall Street futures markets indicated the S&P 500 share index would drift 0.2% higher after dropping 2% in the previous session.A batch of surprisingly upbeat data in recent weeks has scotched a cross-asset rally that began last October, which was based on a scenario of the global economy cooling just enough to persuade hawkish central banks to pause rate hikes.Wall Street posted its worst daily performance of the year on Tuesday, as investors responded to an unexpectedly strong reading from S&P Global’s composite PMI with concerns that robust business conditions would continue to fuel inflation.”The market has been overly optimistic,” said Luca Paolini, chief strategist at Pictet Asset Management.”The economic data has been much more resilient than we all thought (it would be) and we have to accept that.”The MSCI all-country stock index, which bounced 7.1% in January, has fallen 2% so far this month, depressed by abonanza U.S. jobs reportand rate fears, even as economists upgraded their forecasts for economic growth in the United States and the euro zone this year.The yield on the 10-year U.S. Treasury, which moves inversely to its price, fell 2 basis points (bps) on Wednesday to 3.953%, after touching its highest since November.That was a reversal of a strong showing for Treasuries at the start of the year, when bonds rallied to reflect bets of inflation declining. The benchmark 10-year yield has risen about 60 bps from its January low.Story continuesSwaps markets now anticipate the Fed, the world’s most influential central bank, will raise its funds rate, currently set at 4.5%, to 4.75%.New Zealand’s central bank raised interest rates by 50 bps on Wednesday to a more than 14-year high of 4.75%, flagging more monetary tightening to come.”It concerns the market that central banks will have to hike rates a lot more to curb inflation,” said Kerry Craig, JPMorgan Asset Management’s global market strategist.Geopolitical tensions also rattled markets on Wednesday, after Russian Vladimir Putin delivered a warning to the West over Ukraine by suspending its last major nuclear arms control treaty with the United States. U.S. Secretary of State Antony Blinken said Putin’s move was “deeply unfortunate and irresponsible”.The dollar index was flat, but remained on track for a 2% gain so far in February, which would be its first monthly gain in five.Brent, the global oil benchmark, dropped 0.8% to around $82 a barrel.(Reporting by Naomi Rovnick; Additional reporting by Selena Li; Editing by Bradley Perrett and Kim Coghill)

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