GLOBAL MARKETS-Asian shares defensive; eyes on EU summit, U.S. stimulus talks
By Swati Pandey
SYDNEY, July 20 (Reuters) - Asian shares began warily on Monday as investors eyed efforts to stitch together more fiscal stimulus in the eurozone and United States to help economies ride out the effects of a record jump in COVID-19 cases globally.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was flat at 541.49, with Australian shares down 0.3% and South Korea's KOSPI .KS11 just a shade higher.
Japan's Nikkei .N225 was up 0.1%.
E-minis for the S&P 500 ESc1 rose 0.1% in early Asian trading.
Last week, European, U.S. .SPX and other equity markets .MIWD00000PUS notched their third weekly gain in a row, although the pace of the rally has slowed.
The Dow .DJI fell 0.23% on Friday, the S&P 500 .SPX gained 0.29% and the Nasdaq Composite .IXIC added 0.28%. .N
Investor focus is squarely on a European Union Summit where leaders are haggling over a plan to revive economies throttled by the COVID-19 pandemic.
The leaders are at odds over how to carve up a vast recovery fund designed to help haul Europe out of its deepest recession since World War Two, and what strings to attach for countries it would benefit. Diplomats said it was possible that they would abandon the summit and try again for an agreement next month.
In response, the euro EUR=EBS opened 0.2% lower in early Asian trade to go as low as $1.1400. It was last up 0.2% at $1.1442.
"The commitment by EU leaders in extending talks and reports of further talks if no agreement is reached today shows the desire to have the recovery fund in some form," said NAB analyst Tapas Strickland.
However, it was a likely to be "a very long and winding road," before a deal is reached, he added.
In the United States, the Congress is set to begin debating a new aid package this week, as several states in the country's South and West implement fresh lockdown measures to curb the virus.
The virus has claimed over 140,000 U.S. lives in total since the pandemic started, and Florida, California, Texas and other southern and western states shatter records every day.
The United States, with 3.7 million total cases, has almost as many infections as the next three hardest-hit countries combined - Brazil, India and Russia.
"Wall Street remains upbeat, but sentiment on Main Street is turning grim in response to the upsurge in COVID-19 cases that is prompting a renewal of lockdown restrictions," Oxford Economics said in a note.
"Furloughed workers are more pessimistic about getting their jobs back; they are also becoming more concerned about the loss of income if a fiscal package with new relief is not forthcoming."
Fiscal support is also a focus in Australia where the government will release a 'mini budget' later this week.
In currencies, the dollar was a shade higher on the Japanese yen JPY= at 107.06. Sterling was mostly flat at $1.2571.
The Australian dollar AUD=D3 ticked up 0.1% at $0.7002. That left the dollar index =USD barely changed at 95.905.
In commodities, spot gold XAU= was flat at 1,808.5 an ounce.
U.S. crude CLc1 rose 6 cents to $40.65 per barrel and Brent LCOc1 was up 2 cents at $43.15.
Asia stock marketshttps://tmsnrt.rs/2zpUAr4
(Reporting by Swati Pandey; editing by Richard Pullin)
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