GLOBAL MARKETS-Asian stocks fall on virus worry, China stock rally pauses

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Equities and risk assets take a hit
* China stocks fall after red-hot rally
* Growth in U.S. coronavirus cases unsettles markets

By Stanley White and John McCrank
TOKYO/NEW YORK, July 10 (Reuters) - Asian shares and U.S.
stock futures fell on Friday as record-breaking new coronavirus
cases in several U.S. states stoked concerns that new lockdowns
could derail an economic recovery, while investors looked
forward to earnings season.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS fell 0.76%. Australian stocks .AXJO dropped
0.42%, while Japanese stocks .N225 declined by 0.4%.
Shares in China .CSI300 fell 0.72%, the first decline in
more than a week, as investors booked profits on a surge in
equities to a five-year high.
E-mini futures for the S&P 500 EScv1 erased early gains to
trade down 0.01%.
The Antipodean currencies fell and the yen rose as traders
shunned risk and sought safe havens.
More than 60,500 new COVID-19 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. That heightened concerns that renewed lockdowns could hurt
the economic recovery.
The number of Americans filing for jobless benefits dropped
to a near four-month low last week, data showed. But investors remained cautious as the report also said a
record 32.9 million people were collecting unemployment checks
in the third week of June, supporting expectations the labor
market would take years to recover from the COVID-19 pandemic.
"Weakness in financial stocks, with the bank sub-index down
2.5%, comes ahead of next week's Q2 reporting season that sees
JP Morgan, Citigroup and Wells Fargo all report next Tuesday and
following news that Wells Fargo is planning to cut 'thousands'
of jobs starting later this year," said Ray Attrill, head of FX
strategy at National Australia Bank.
On 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.
Mainland China shares fell on Friday for the first time
since June 29. Shares had surged to the highest since 2015 on
Thursday, fueled by retail investor enthusiasm and policy
support, even as regulators cracked down on margin financing and
as state media warned of market risks. The rise in China's mainland equities has some similarities
to the bubble there five years ago, but it is not yet close in
scale, and prices could continue to inflate for some time, said
Capital Economics economist Oliver Jones.
"That said, another boom-bust cycle in China's equities
could have even greater knock-on effects for markets elsewhere
than before, with foreign holdings far higher now than five
years ago," he said.
Fueled by illegal margin lending, the 2015-16 market bubble
saw the benchmark Shanghai index .SSEC fall more than 40% from
its peak in just a few weeks. In the currency market, the yen edged up against the dollar
JPY= and the euro EURJPY= as investors bought the
traditional safe haven.
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. U.S. crude CLc1 fell 0.23% to $39.53 a barrel, while Brent
crude LCOc1 edged 0.02% lower to $42.34 per barrel due to
concerns about a long-term decline in global energy demand.