GLOBAL MARKETS-European shares fall to 2-week lows as COVID-19 cases rise

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By Elizabeth Howcroft
LONDON, Sept 21 (Reuters) - European shares fell on Monday
as rising COVID-19 infection rates in Europe prompted renewed
lockdown measures in some countries, casting doubt over the
economic recovery, with a lack of U.S. stimulus also weighing on
sentiment.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was down 0.5% at 0748 GMT.
European indexes opened lower, with the pan-European STOXX
600 down 1.7% .STOXX , at its lowest in nearly two weeks.
London's FTSE 100 was at a two-week low, down 2.4% .FTSE and
Germany's DAX fell 2% .GDAXI .
Banking shares slid after a media report on how several
global banks moved large sums of allegedly illicit funds over
nearly two decades. HSBC HSBCUK.UL shares sunk to a 25-year low in Hong Kong.
Investors are becoming more cautious about Europe, amid a
sharp uptick in new COVID-19 cases. European countries including
Denmark, Greece and Spain have introduced new restrictions on
activity.
Britain is considering a second national lockdown as new
cases rise by at least 6,000 per day. Germany's health minister said the rising new infections in
countries like France, Austria and the Netherlands is worrying.
Investors will be looking ahead to flash PMI data on
Wednesday for the first hints of how economies have fared in
September.
"Concerns are rising that the summer recovery is probably as
good as it gets when it comes to the recent rebound in economic
activity," wrote Michael Hewson, chief market analyst at CMC
Markets UK.
"This reality combined with the growing realisation that a
vaccine remains many months away, despite President (Donald)
Trump's claims to the contrary, has made investors increasingly
nervous, as we head into an autumn that could see lockdowns
reimposed," he said.
The dollar declined for the second week running last week,
hurt by the U.S. Federal Reserve's commitment to keeping rates
lower for longer.
It was trading less than 0.1% up against a basket of
currencies at 92.997 at 0750 GMT =USD .
Seven members of the Fed will speak this week - including
chairman Jerome Powell appearing before Congressional committees
- so investors will be looking for hints to determine the
dollar's direction.
The safe-haven yen was in its sixth consecutive session of
gains versus the dollar, up around 0.4% at 104.185 JPY=EBS .
Japan has public holidays on Monday and Tuesday this week,
meaning volumes are thin in Asian trading.
The euro was flat against the dollar at $1.18325 EUR=EBS ,
while the safe Swiss franc rose against both the dollar and euro
EURCHF=EBS CHF=EBS .
The benchmark 10-year German government bond yield was down
2 basis points at -0.507% DE10YT=RR , with most high-rated euro
zone government bond yields down by a similar amount.
The European Central Bank will review how long its emergency
pandemic bond-purchase scheme should go on, the Financial Times
reported. The European Council meets in a summit on Thursday and
Friday this week.
Elsewhere, oil prices fell, with Brent crude LCOc1 down
1.8% at $42.39 a barrel at 0745 GMT, while U.S. crude CLc1 was
down 1.9% at $40.34 a barrel. Gold prices edge higher, helped by the weaker dollar, with
spot gold XAU= up 0.1% at $1,950.93 per ounce by 0747 GMT.


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