GLOBAL MARKETS-Stocks fall as China cancels U.S. farm visits, yields dip

* China agriculture delegation scraps U.S. farm visit to
Montana
* MSCI world equity index slips
* Central bank easing helps risk sentiment but trade
tensions hurt
* Treasury yields fall; dollar falls vs yen
* Oil prices edge higher

(Updates to U.S. close of trading)
By Saqib Iqbal Ahmed
NEW YORK, Sept 20 (Reuters) - An index of global stock
markets surrendered early gains on Friday after Chinese
agriculture officials who were to visit U.S. farm states next
week canceled their trip, dampening optimism on U.S.-China trade
talks.
Renewed worries about the state of the ongoing trade
tensions between Washington and Beijing drove Treasury yields
lower and pushed the U.S. dollar down against the safe-haven
Japanese yen.
Stocks had started the day stronger as stimulus measures by
major central banks eased worries about growth. But optimism
faded following the report that the Chinese officials canceled
their visit. The cancellation came as U.S.-Chinese trade talks were held
in Washington and U.S. President Donald Trump said he wanted a
complete trade deal, not just an agreement for China to buy more
U.S. agricultural goods.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 47 countries, was 0.23% lower.
On Wall Street, stocks, which had started the day strong
following China cutting a key lending rate for the second
straight month, reversed course on the news of the canceled
farm visits.
Equity markets have largely welcomed the central bank moves
in recent days, including interest rates cuts by the European
Central Bank and the U.S. Federal Reserve.
For months, Wall Street has bounced up and down with signs
of improvement or deterioration in trade talks, often based on
comments or tweets from Trump, a cycle investors have grown
accustomed to.
"In this case, it's a bit more concerning because it's China
making the decision, rather than Trump," said Willie Delwiche,
markets strategist at Baird in Milwaukee.
The Dow Jones Industrial Average .DJI fell 159.72 points,
or 0.59%, to end at 26,935.07, the S&P 500 .SPX lost 14.72
points, or 0.49%, to close at 2,992.07 and the Nasdaq Composite
.IXIC dropped 65.21 points, or 0.8%, to finish at 8,117.67.
The pan-European STOXX 600 index .STOXX closed up 0.29%,
after giving up some of the gains logged earlier in the session.
Increased concerns that the United States and China are
unlikely to forge a trade deal in the near term drove U.S.
Treasury yields lower. Benchmark 10-year notes US10YT=RR gained 15/32 in price to
yield 1.7215%, down from 1.774% on Thursday.
Bonds were also supported after the New York Federal Reserve
said it plans to pour cash into the U.S. banking system through
early October to avert another market disruption, after the cost
of loans in the overnight repurchase agreement (repo) market
soared to 10% on Tuesday. In foreign exchange markets, the dollar fell sharply against
the yen as investors weighed the latest developments on the
U.S.-China trade front.
The yen tends to attract demand in times of market stress as
the currency is backed by Japan's current account surplus, which
offers it more resilience than currencies of deficit-running
countries.
The dollar was 0.43% lower against the Japanese currency.
Against a basket of major currencies .DXY , the greenback was
up 0.2%. Oil prices eased on Friday on renewed concern over the
U.S.-China trade dispute, but futures still posted weekly gains,
with Brent marking its biggest weekly increase since January
after an attack on Saudi Arabia's energy industry last weekend.
Brent crude LCOc1 futures fell 12 cents to settle at $64.28
a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1
futures ended 4 cents lower at $58.09 a barrel.
Lingering tensions in the Middle East along with increased
worries about the trade tensions supported gold, which was on
pace for its first weekly rise in four. Spot gold XAU= was up
1.12% at $1,515.78 an ounce. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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