* European equities rally turns sour
* Investors fret over infections in U.S, Germany, China
* Wirecard shares plunge 60%
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
By Tom Arnold and Hideyuki Sano
LONDON/TOKYO, June 18 (Reuters) - Global stocks drifted
lower on Thursday as an increase in new coronavirus cases in
some U.S. states and China crushed hopes of a swift world
economic comeback from the pandemic.
Beijing, hit in recent days by its largest number of
infections since early February, has brought its latest
coronavirus outbreak under control, a Chinese medical expert
said on Thursday. Several U.S. states including Oklahoma, where President
Donald Trump plans a campaign rally on Saturday, reported a
surge in new coronavirus infections. The daily count of infections also hit a new benchmark in
California and Texas, while around 400 workers tested positive
for the virus at an abattoir in northern Germany, prompting the
closure of local schools.
"We were worried about a second wave and you are seeing
worrying signs in some states in the U.S., some flare-ups in
Germany and China," Justin Onuekwusi, portfolio manager at Legal
& General Investment Management.
"It's going to be a theme where we see economies having to
do mini-lockdowns and isolation measures in order to contain the
virus. The question is how much it affects markets."
MSCI's broadest index of World shares .MIWD00000PUS was
0.2% lower. The pan-European STOXX 600 .STOXX was 1.1% lower,
as its rally earlier in the week petered out.
Shares in Wirecard WDIG.DE plunged by 60% in Frankfurt
trading, wiping 8 billion euros off its market worth after the
firm's auditor refused to sign off its 2019 accounts over a
missing $2.1 billion. Creditors could call in loans as soon as
Friday. S&P 500 mini futures EScv1 were 0.6% down.
CHINESE BRIGHT SPOT
China's blue-chip CSI300 shares .CSI300 were a bright
spot, earlier adding 0.7%, helped by reassurances from its
central bank governor that the world's second largest economy
would maintain ample financial system liquidity in the second
half of 2020 as the economy recovers. Euro zone bonds hardly budged, even as the European Central
Bank announced record demand for its new round of cheap loans,
with the strong take-up expected to support the bond market.
Italian yields slipped slightly, with 10-year yields falling
to a new low since late March of 1.33%. They were last down 3
basis points to 1.35%. IT10YT=RR British government bond yields touched their highest since
June 10 after the Bank of England increased its bond-buying
programme by a further 100 billion pounds ($125 billion) to help
revive the economy, but sharply slowed the pace of its
purchases. L8N2DV2K2
Some investors remain worried about further paralysis in
Washington as Trump's former national security adviser John
Bolton accused him of sweeping misdeeds that included explicitly
seeking Chinese President Xi Jinping's help to win re-election.
Border tensions between North and South Korea, and between
India and China, also helped sour sentiment for risky assets.
"In the near-term, we have had a lot of risk-off factors
including Bolton and geopolitical tensions in Asia," said
Masahiko Loo, portfolio manager at AllianceBernstein in Tokyo.
In currency markets, the safe-haven Japanese yen earlier
touched a six-day high of 106.70 in Asian trading and was last
trading neutral at 107 JPY=EBS .
The Norwegian crown was up 0.6% versus the dollar at 9.4560
NOK=D3 and by 0.5% versus the euro at 10.6430 EURNOK=D3 .
The euro was also hardly changed against the greenback, at
$1.1250 EUR=EBS . The British pound remained firmly in negative territory
despite the Bank of England increasing its bond-buying scheme.
It was 0.4% down against the dollar GBP=D3 at $1.2508 and 0.4%
down against the euro at 89.85 pence EURGBP=D3 . The Australian dollar AUD=D4 fell 0.3% to $0.6864, hit by
worse than expected employment data.
Australia's unemployment rate jumped to the highest in about
two decades in May as nearly a quarter of a million people lost
their jobs due to the coronavirus pandemic-driven shutdowns.
Oil prices recovered from losses earlier in the session,
with U.S. crude futures CLv1 up 15 cents to $38.11 per barrel,
while international benchmark Brent LCOc1 added 34 cents to
$41.05 a barrel. O/R
In commodity markets, gold XAU= was up 0.3% at $1,721.04
per ounce. /GOL
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
S&P 500 market cap, daily moves https://tmsnrt.rs/2YCDodm
Asset performance vs outbreak https://tmsnrt.rs/2YF3T1T
Stocks and oil versus COVID-19 cases https://tmsnrt.rs/3cXWNdO
Asia stock markets https://tmsnrt.rs/2zpUAr4
Second wave in the United States https://tmsnrt.rs/2BmXZKv
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>