GLOBAL MARKETS-Stocks fight for ground ahead of Georgia Senate runoff

* World shares pull back from record high
* Georgia Senate runoff seen as political risk
* Yuan lifted by PBOC fixing
* State of emergency weighs on Tokyo shares
* Oil hit by delay on output decision

By Marc Jones
LONDON, Jan 5 (Reuters) - World shares struggled on Tuesday
amid new COVID lockdowns in Europe and Senate runoff races in
Georgia that will affect incoming U.S. President Joe Biden's
ability to pursue his preferred economic policies.
Wall Street suffered its worst start to a year since 2016 on
Monday and with volatility gauges up, the euro up and Germany
expected to follow Britain with a lockdown extension, European
equities were under pressure. .EU
Markets were also watching to see whether Tuesday's Georgia
run-off election enable the Democrats to flip both Senate seats
and disrupt what markets view as a delicate political balance in
Washington.
"The result could be quite crucial on how much leeway Biden
has to push his own agenda," said Wells Fargo Asset Management's
global head of multi-asset solutions, Matthias Scheiber.
Markets are likely to "move on" if the vote sees Republicans
maintain control of the Senate, Scheiber said. A Democrat win
would see additional fiscal stimulus priced in as well as
potential additional regulation for the energy and tech sectors.
"We could see quite a mixed market," he said. Investors
having been increasingly looking to hedge their equity positions
following the recent strong rally, he said.
There was focus on the currency markets again as the
dollar's slide continued.
China raised its official yuan exchange rate by the biggest
margin since abandoning its peg in 2005, which helped support
demand for other currencies and kept MSCI's emerging-market
currency index near the record high it had set on Monday.
EMRG/FRX
In the offshore market, the yuan strengthened as far as
6.4419 CNH=EBS for the first time since June 2018. It started
the week at 6.4944.
"If the Chinese currency is going up, it's providing a
degree of support for Asian currencies in general, and I suspect
that's why the U.S. dollar is partially reversing the gains that
we saw from Wall Street time," said Ray Attrill, head of FX
strategy at National Australia Bank in Sydney.
"It's a very big move by any historical yardstick, and I
don't think you can ignore that."
The dollar index weakened 0.2% to 89.731 =USD . It dropped
as low as 89.415 on Monday for the first time since April 2018,
but ended the day with a 0.1% gain after U.S. stocks slid.
The euro rose 0.2% to $1.22765 EUR=EBS after reaching
$1.231 on Monday. The British pound regained 0.2% to $1.3573
GBP= having tumbled the previous day after the UK's COVID
surge had forced another nationwide lockdown. ON MARKETS' MIND
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS pulled back from a record high.
Australian stocks .AXJO fell 0.3%. Chinese shares .CSI300
ended higher.
In Hong Kong, China Mobile 0941.HK , China Unicom
0762.HK , and China Telecom 0728.HK rallied by more than 6%
after the New York Stock Exchange suddenly abandoned plans to
de-list the companies' shares following a U.S. executive order.
Japanese shares .N225 lost 0.3% after the government said
it would reach a decision on a state of emergency for Tokyo and
surrounding cities on Thursday to curb record coronavirus
infections. U.S. S&P 500, Nasdaq and Dow Jones stock futures ESc1 all
edged up about 0.2% after Monday's falls .N .
Both Georgia elections are tight and the results may not be
immediately known, which could lead to a repeat of the chaotic
vote re-counts after the U.S. presidential election in November.
Outgoing Republican President Donald Trump's call to
pressure Georgia's top election official to "find" votes to
overturn his loss to President-elect Biden in the state has also
unnerved some investors. In commodity markets, oil futures were steady as traders
awaited a meeting later on Tuesday where major crude producers
are set to decide output levels for February.
U.S. crude futures CLc1 were higher at $47.96 a barrel.
Brent futures LCOc1 edged up 0.7% to $51.47 per barrel.
Gold also gained, inching up 0.2% to $1,946 per ounce
XAU= . Cryptocurrency Bitcoin steadied at 31,500 after a sharp
drop overnight. BTC=BTSP GOL/

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2020 asset performance http://tmsnrt.rs/2yaDPgn
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