GLOBAL MARKETS-Shares lose ground as U.S. presidential debate looms

* Euro STOXX 600 loses 0.4%
* Wall Street futures gauges point to losses
* Dollar flat as Trump-Biden debate in focus
* German bund yields at 7 week-low
* Pound at one-week high as Brexit talks begin
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Tom Wilson
LONDON, Sept 29 (Reuters) - European shares slipped on
Tuesday as investors awaited a pivotal U.S. presidential debate
and watched for progress of a fiscal stimulus package in
Washington.
The broad Euro STOXX 600 .STOXX fell 0.4%, eroding hefty
gains from a day earlier, with indexes in Frankfurt .GDAXI ,
Paris .FCHI and London .FTSE losing between 0.2% and 0.5%.
Among the sectors in negative territory were
growth-sensitive banks .SX7P , automakers .SXAP and travel &
leisure .SXTP , all down 0.8%-1.5%.
U.S shares were set to open a touch lower, with futures for
the S&P 500 EScv1 and Nasdaq NQc1 giving up earlier gains to
slip into negative territory. Hard-hit sectors like hotels,
banks and airlines had made strong gains on Monday.
Investors are weighing the potential impact on the U.S.
economy of either the re-election of President Donald Trump or a
victory for Democratic presidential nominee Joe Biden.
Many see a Biden victory increasing the chances of further
fiscal stimulus to counter the economic damage from the COVID-19
pandemic, judging such a scenario a boon for stocks.
"What seems clear is that were you to see a blue wave, a
Democratic sweep, you'd see substantial fiscal stimulus," said
Mike Bell, global market strategist at J.P. Morgan Asset
Management. "The risk, I have always thought, to this recovery
is premature fiscal tightening."
With time running out to change minds or influence undecided
voters, the stakes are high as the two White House candidates
take the stage five weeks before the Nov. 3 election.
Biden's campaign has seized on a fresh line of attack on the
eve of the debate with Trump - set for after the U.S. market
close - accusing the Republican incumbent of gaming the system
to avoid paying his fair share of taxes.
"Tonight's debate will be critical, since it represents one
of the last set-piece opportunities for either candidate to
change the contours of the race," Deutsche Bank analysts wrote
in a note.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in nearly 50 countries, was flat.
As the global death toll from COVID-19 rose past one
million, according to a Reuters tally, investors have remained
focused on prospects for a stimulus package to help the U.S.
economy recover from the damage wrought by the virus.
U.S. House of Representatives Speaker Nancy Pelosi said on
Monday that Democratic lawmakers had unveiled a new, $2.2
trillion coronavirus relief bill. Pelosi in recent days has said
she thinks a deal can be reached with the White House on a new
coronavirus relief package and that talks were continuing.

Earlier, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS was flat, shedding earlier gains.
Stimulus packages were also in focus in bond markets, where
Germany's 10-year bond yield DE10YT=RR fell to its lowest in
seven weeks before first-estimate inflation readings for
September. CONFIDENT CONSUMERS?
Also in focus was economic data due later in the day that is
set to shed light on the U.S. economy's progress, with consumer
confidence and home price data on the agenda.
The dollar held steady against a basket of currencies at
94.185 =USD , drifting away from a two-month high of 94.745
reached last week.
Elsewhere, sterling extended its overnight gains on optimism
about a Brexit trade deal as the European Union and Britain
kicked off a decisive week of talks.
The pound gained 0.2% to $1.2853 GBP=D3 , just below the
$1.2930 mark touched overnight. Against the euro, sterling
changed hands at 90.775 pence.
"The surge of the pound yesterday was a reflection of the
more positive mood-music as the talks kicked off," MUFG analysts
wrote, adding the pound could extend gains this week.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Emerging markets http://tmsnrt.rs/2ihRugV
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(
Reporting by Tom Wilson, Editing by William Maclean and Mark
Potter)