* Equities and risk assets take a hit
* Safe assets in demand: yen, U.S. Treasuries rise
* China stocks fall 2% after red-hot rally
* Growth in U.S. coronavirus cases unsettles markets
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Thyagaraju Adinarayan
LONDON, July 10 (Reuters) - World stocks and oil prices were faltering on Friday as record-setting new coronavirus cases in several U.S. states led to worries that more lockdowns may be necessary, making a quick economic recovery unlikely.
The upcoming second-quarter earnings season, expected to be the worst for Europe and the United States since the 2008/09 financial crisis, added to the woes, pushing investors to chase safe-haven assets, such as U.S. Treasuries and the yen.
European stocks declined 0.3%, taking cues from Asia, where China ended its rally. Shares in China .CSI300 fell 1.8% from a five-year high, as state media discouraged retail investors from chasing the market higher.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.3%. Australian stocks .AXJO declined by 0.6% as an extension of loan-payment deferrals hit the banking sector. Japanese stocks .N225 were down by 1.1%.
The e-mini futures for the S&P 500 EScv1 erased early gains to trade down 0.6%.
More than 60,500 new coronavirus infections were reported across the United States on Thursday, the largest single-day tally of cases by any country since the virus emerged late last year in China. sharp increase in confirmed cases has led to growing concerns that a return to broad lockdowns lies ahead," Goldman Sachs (NYSE:GS) wrote in a note. "While lockdowns can slow down virus spread effectively, they come at very high economic cost."
Some Asian cities that had appeared to have contained the disease, such as Tokyo, Hong Kong and Melbourne, have also seen a spike in cases, prompting investors to take shelter in safe-haven assets.
In the currency market, the yen rose 0.4% against the dollar JPY= and 0.5% versus the euro EURJPY= . U.S. Treasury yields US10YT=RR dipped to their lowest levels since late April.
Gold was the only safe haven that didn't join the rush-for-safety party, sliding 0.3%, a day after hitting an eight-year high.
While economic data continued to improve, with the number of Americans filing for jobless benefits dropping to a near four-month low last week, investors remained cautious. A record 32.9 million people were still collecting unemployment checks. Thursday, the Dow Jones Industrial Average .DJI fell 1.39% and the S&P 500 .SPX dropped 0.56%, but the tech-heavy Nasdaq .IXIC rose 0.53% to its fifth record closing high in six days.
In other moves, the Australian and New Zealand dollars AUD= NZD= , which are often traded as a liquid proxy for risk because of their close ties to China's economy, both fell against the greenback.
The Aussie also fell as local officials use lockdowns and border restrictions to contain a sudden increase in coronavirus cases. crude oil CLc1 fell 2% to $38.81 a barrel and Brent crude LCOc1 fell 1.7% to $41.63 per barrel amid concern about a long-term decline in global energy demand.
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