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GLOBAL MARKETS-Global shares waver on coronavirus fears, gold gains

Published 09/07/2020, 02:16 am
Updated 09/07/2020, 02:18 am
© Reuters.
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(New throughout, updates prices, market activity and comments to U.S. market open)

* European stocks close lower

* Oil prices trade relatively stable

* Gold at 9-year peak on safe-haven demand

* China blue-chip stocks close at five-year high

* World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Herbert Lash

NEW YORK, July 8 (Reuters) - Global stocks wavered on Wednesday, pressured by fears that a surge in coronavirus cases would slow the U.S. economy, while safe-haven demand lifted gold prices above $1,800 a ounce for the first time since 2011.

Stocks on Wall Street rose, boosted by technology shares, while the dollar slid as the number of confirmed U.S. coronavirus cases surpassed 3 million, affecting nearly one of every 100 Americans. Still, demand for the dollar proved remarkably stable given Wall Street's strength.

"The buck tends to struggle when Wall Street rallies," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

Currencies have largely consolidated given the "the back and forth of optimism over the economic outlook," Manimbo said.

Still, investor sentiment was on the sour side on the resurgence of the pandemic in the United States and elsewhere. Oil prices were steady as rising U.S. crude inventories and the surge in COVID infections put the brakes on a recent recovery.

The MSCI world equity index .MIWD00000PUS , a gauge of equity markets in 49 nations, rose 0.22% but the pan-European STOXX 600 .STOXX slid 0.71%

Frankfurt .GDAXI , Paris .FCHI and London .FTSE all closed lower as investors assessed the risk of more restrictive social distancing measures in some places and upcoming earnings.

London-listed HSBC HSBA.L shed 3.4% after Bloomberg reported U.S. President Donald Trump's top advisers had weighed proposals to undermine the Hong Kong currency's peg to the dollar, which could limit access to the greenback by Hong Kong banks. is impossible for investors not to grow weary and eventually, at some point, fall prey to the endless drip of negative Covid-19 stories and how the second-wave virus will crush the market," said Stephen Innes, chief global market strategist at AxiCorp.

"Despite the lack of market participation, it certainly feels like we are gradually morphing from the view of a fragile recovery to one of full-bore skepticism," Innes said.

The economy would likely suffer as certain U.S. states reimpose coronavirus-related restrictions, but imposing another nationwide shutdown would be "a big mistake," White House economic adviser Larry Kudlow said. Wall Street, the Dow Jones Industrial Average .DJI rose 0.07%, the S&P 500 .SPX gained 0.18% and the Nasdaq Composite .IXIC added 0.72%.

In China, stocks extended their gains to seven sessions, with the blue-chip index .CSI300 up 1.6% to its highest close since June 2015.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 1.1%, just off a four-and-a-half-month high reached the day before.

Coronavirus cases were also on the rise in the Australian state of Victoria, which led to lockdown measures being re-imposed in Melbourne, the country's second-biggest city. markets were focused on a meeting on Wednesday between European Union officials to discuss the shape of the EU's recovery fund.

Yields on German 10-year government debt DE10YT=RR edged 2 basis points lower to -0.477%, just above a one-week low of -0.495%. dollar index =USD , which tracks the greenback versus a basket of six currencies, fell 0.3% to 96.592. The euro EUR= was up 0.45% while the yen JPY= was down 0.10% at $107.4000.

Spot gold prices XAU= rose 0.88% to $1,810.10 an ounce.

Brent futures LCOc1 up $0.01 at $43.09 a barrel. U.S. crude CLc1 was down $0.01 at $40.61 per barrel.

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