GLOBAL MARKETS-Stocks gain on recovery hopes, dollar on safe-haven bid

(Adds gold, oil settlement prices)
* European shares add to best gains in nearly a month
* Wall Street trend higher as new virus cases offset growth
hopes
* Mood restrained by surge in virus cases, China-India spat

By Herbert Lash
NEW YORK, June 17 (Reuters) - A gauge of global equities
edged higher on Wednesday, adding to the prior day's rally on
economic and vaccine hopes, while fresh coronavirus outbreaks
and rising geopolitical tensions in Asia boosted demand for the
dollar and safe-haven debt.
Optimism over a quick economic recovery has been tempered by
more global cases of the coronavirus, including an outbreak in
Beijing and a rising tide of infections in U.S. states that are
reopening their economies.
U.S. Treasury yields and crude prices fell on concerns over
the fresh outbreaks, but also drew some support from stimulus
measures and positive tests of a drug trial for dexamethasone
that could save some critically ill COVID-19 patients.
The dollar mostly rose as investors wary of wider
geopolitical risks sought its relative safety as Federal Reserve
Chair Jerome Powell testified for a second day before Congress.
The Fed will use its "full range of tools" to cushion
households and businesses, Powell told lawmakers, echoing
remarks he made on Tuesday that were welcomed by investors.

Rising tensions between North and South Korea spurred demand
for safe havens, as did clashes between Indian and Chinese
troops at a disputed border site. "There's a bit of afterglow from yesterday," said Michael
Arone, chief investment strategist at State Street Global
Advisors in Boston.
"You're seeing some follow-through" on news of a $1 trillion
infrastructure program planned by the Trump administration,
record retail sales in May and the new drug trial results, he
said.
After the sharp 50-day rally in equities from March lows, a
period of several months where the market doesn't do much can be
expected, Arone said.
"We're seeing that struggle, that tug of war, that friction
play out already this month," Arone said. "June hasn't been a
straight shot to the moon. That's what you're likely going to
see for the balance of the summer, not a bad thing."
European shares climbed further, adding to their best gains
in almost a month a day earlier, but the Nikkei .N225 in Tokyo
eased 0.5% after posting its biggest daily gain in three months
the prior day.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.47% but was likely to be pulled lower as U.S. stocks,
which account for more than half the world benchmark's
performance, were mixed.
The pan-European STOXX 600 index .STOXX rose 0.74% and
emerging market stocks rose 0.49%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
47.26 points, or 0.18%, to 26,337.24 and the S&P 500 .SPX
gained 11.37 points, or 0.36%, to 3,136.11. The Nasdaq Composite
.IXIC added 84.48 points, or 0.85%, to 9,980.34.
Chinese blue chips .CSI300 recovered from an early dip to
finish steady despite Beijing's worst resurgence in COVID-19
cases in four months.
"The tension between better economic data and rising
COVID-19 cases continues to drive market volatility," said
Antoine Bouvet, senior rates strategist at ING in London.
The dollar index =USD rose 0.145%, with the euro EUR=
down 0.28% to $1.1231. The Japanese yen JPY= strengthened
0.23% versus the greenback at 107.11 per dollar.
Benchmark 10-year notes US10YT=RR fell 1.4 basis points to
yield 0.7397%. The 10-year German Bund DE10YT=RR rose 0.7
basis point to yield -0.418. GVD/EUR
Oil prices swung in and out of the red amid an increase in
U.S. crude inventories.
U.S. crude CLc1 fell 42 cents to settle at $37.96 a
barrel, while Brent LCOc1 settled down 25 cents at $40.71.
Gold prices were little changed, buoyed by concerns over a
second coronavirus wave and expectations for low interest rates
in the near term. But a firm dollar put a lid on gains.
U.S. gold futures GCcv1 settled slightly down at $1,735.60
an ounce.

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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
World stocks and oil vs coronavirus cases https://tmsnrt.rs/2YHK4H8
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