GLOBAL MARKETS-Stocks ease as gloomy data takes shine off U.S. stimulus hopes

(Updates, adds detail)
* Euro zone business activity shrank in January, survey
shows
* Italy 10-year benchmark yield at highest since November
* Sentiment also hit by China virus restrictions
* Oil, gold weaker

By Tom Arnold and Swati Pandey
LONDON/SYDNEY, Jan 22 (Reuters) - Global shares slipped off
record highs on Friday as gloomy data reminded investors of the
struggles facing the economic recovery, curbing a rally fuelled
by hopes of U.S. stimulus by newly inaugurated President Joe
Biden.
Sentiment in Europe was already more cautious after
Thursday's European Central Bank meeting, in which the bank's
message was perceived as more hawkish than expected.
The yield on Italian 10-year benchmark bonds IT10YT=RR
touched its highest since early November on reports that Prime
Minister Giuseppe Conte may be tempted by the prospect of a snap
election. The Euro STOXX 600 .STOXX was 0.8% weaker as investors
digested weaker flash PMI readings for January. Lockdown
restrictions to contain the coronavirus pandemic hit the bloc's
dominant service industry. The FTSE 100 index .FTSE slipped 0.5% as data showed
British retailers struggled to recover in December from a
partial coronavirus lockdown the previous month. The MSCI world equity index .MIWD00000PUS , which tracks
shares in almost 50 countries, was 0.2% softer following three
straight sessions of gains. E-Mini futures for the S&P 500
ESc1 stumbled 0.53%.
MSCI's broadest index of Asia Pacific stocks outside of
Japan .MIAPJ0000PUS was 0.8% lower.
The risk-off mood followed a period of relief after the
transition of power in the United States, culminating in Biden's
inauguration on Wednesday and strong expectations that U.S.
stimulus will provide continued support for global assets.
"The fact that there would be U.S. stimulus was well known
and the size of the package and the very high-level details of
what they're aiming for with the package was well known some
while ago," said James Athey, investment director at Aberdeen
Standard Investments.
"The realities of what is likely to be achievable relatively
quickly are not supportive of just blindly buying cyclical
assets. There's a lot more nuance and a lot more politics to go
on before we get there."
Republicans in the U.S. Congress have indicated they are
willing to work with Biden on his administration's top priority,
a $1.9 trillion U.S. fiscal stimulus plan, though some are
opposed to the price tag. Democrats took control of the U.S. Senate on Wednesday,
though they will still need Republican support to pass the
program. China's composite stock index .SSEC slid 0.4%, while the
blue-chip CSI300 index .CSI300 edged up 0.1%.
Travel plans were in limbo for tens of millions of people in
China's northern cities. They have been under some kind of
lockdown amid worries that undetected coronavirus infections
could spread quickly during the Lunar New Year holiday, which is
just weeks away.
China reported 103 COVID-19 cases on Friday.
In currency markets, the U.S. dollar =USD paused after
three straight days of losses, though it was still on track for
its biggest weekly loss since mid-December. The currency was
flat on the day at 90.118.
The Japanese yen was down around 0.1% against the dollar, at
103.63 JPY=EBS .
Data from Japan overnight showed that factory activity
slipped into contraction in January and the services sector was
more pessimistic as emergency measures to combat a COVID-19
resurgence hit sentiment. The dollar's recent slide has been led by investors
ploughing money into higher-yielding currencies on optimism
about a rapid economic recovery led by the U.S. stimulus.
In commodities, oil prices were weighed down by worries that
new pandemic restrictions in China will curb fuel demand in the
world's biggest oil importer. O/R
Brent LCOc1 crude futures fell 1.2% to $55.41 a barrel.
U.S. crude CLc1 was 1.4% lower at $52.39 per barrel.
Spot gold XAU= was down 0.4% at 1,862.3 an ounce.

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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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