GLOBAL MARKETS-Shares struggle to shake off bearish mood

* European stocks edge higher
* Euro rises after ECB meeting
* Greenback set for second week of gains
* Oil prices back under pressure
* World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Arnold and Hideyuki Sano
LONDON/TOKYO, Sept 11 (Reuters) - European shares struggled
for momentum on Friday as doubts about extra monetary stimulus
and overnight falls in U.S. big tech shares kept investors on
edge.
Elevated fears over a messy hard Brexit added to the bearish
sentiment, putting sterling on track for its worst-week since
March after the European Union told Britain it should urgently
scrap a plan to break their divorce treaty.
In other political wrangling, the U.S. Senate on Thursday
killed a Republican bill that would have provided around $300
billion in new coronavirus aid, as Democrats seeking far more
funding prevented it from advancing. That followed European Central Bank President Christine
Lagarde earlier in the day appearing to rule out measures to
weaken the euro.
"Investors were disappointed," said Milan Cutkovic, market
analyst at AxiCorp. "They were hoping that the central bank will
boost the stock market rally by paving the way for further
stimulus measures and talking down the euro.
"But ECB President Christine Lagarde sounded less dovish,
and her remarks about the strong euro left markets unimpressed."
The pan-European STOXX 600 .STOXX opened lower before
gaining 0.2%. MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS added 0.4%, moving away from a
one-month trough touched earlier this week. Japan's Nikkei
.N225 rose after Tokyo dropped its coronavirus alert by one
notch from the highest level as COVID-19 cases trend down.
U.S. futures were higher, pointing to a recovery on Wall
Street after losses on Thursday put the S&P 500 .SPX and the
Nasdaq Composite .IXIC on course for a second straight week of
losses. On Friday, Nasdaq 100 futures NQc1 were up 1.3% and
S&P 500 futures ESc1 0.9% firmer.
The NYSE Fang+ index of big 10 tech companies .NYFANG has
lost 5.4% so far this week -- its biggest weekly loss since the
market turmoil in March if sustained by the end of Friday.
Still, the index is more than double its March trough and
investors have gathered that their high valuations are
justifiable in light of near zero interest rates in much of the
developed world and massive liquidity the world's central banks
have created.
Many investors have said the selloff was a healthy
correction. Yet, with the world's stocks still trading near the most
expensive levels relative to profit outlook since the 2000 tech
bubble, some analysts called for caution.
"Global shares had rallied on expectations of economic
recovery from lockdowns. But as the autumn begins (in the
northern hemisphere), people wonder if the coronavirus
infections could worsen," said Kozo Koide, chief economist at
Asset Management One.
"You never know if vaccine deployment is that easy nor if
banks need to aside more provisions for struggling firms in
hospitality sector. Considering all that, investors are likely
to question the current valuations can be justified," he said.
In currency markets, the British pound advanced 0.3% to
1.2840 GBP=D3 but stayed flat versus the euro EURGBP=D3
after one of the heaviest selloffs this year sent the pound
falling nearly 2% against the euro on Thursday. FRX
The European Union is ramping up preparations for a
tumultuous end to the four-year Brexit saga after Britain
explicitly said this week that it plans to break international
law by breaching parts of the Withdrawal Agreement treaty that
is signed in January.
After crashing by a record 20% in the second quarter,
Britain's economy grew by 6.6% in July, slower than June's
monthly rate, the Office for National Statistics (ONS) said.
The euro rose slightly on Friday and was last trading up
0.2% at $1.1841 EUR=EBS after Thursday's ECB press conference.
But any move higher may be curtailed, however, by ECB chief
economist Philip Lane's warning on Friday that a strong euro
will further dampen price pressures. The U.S. dollar was set for a second week of gains, an index
which tracks it against major currencies showed =USD . It
gained overnight as U.S. equity market jitters had investors
sticking to safer assets.
Government bond yields across the euro area fell after
Lane's comments that inflation will be persistently low in the
coming years.
Oil prices were under pressure from a surprise rise in U.S.
stockpiles and weak demand due to the coronavirus pandemic.
Brent crude LCOc was down 0.4% at $39.91 a barrel after
falling nearly 2% on Thursday. U.S. crude CLc1 dropped 0.2% to
$37.23 a barrel, having fallen 2% in the previous session. O/R
As the U.S. dollar rebounded, gold XAU= was down 0.5% at
$1,943.53 per ounce after hitting its best level since Sept. 2
on Thursday. GOL/

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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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(Editing by Toby Chopra)