GLOBAL MARKETS-Asia stocks rebound as hopes of more stimulus offset virus worries

© Reuters.

* Asian shares recoup some of previous day's losses
* European stock futures up slightly
* Hopes of more U.S. fiscal spending suppress other concerns
* Euro eyes EU summit amid hopes of recovery fund deal

By Hideyuki Sano
TOKYO, July 17 (Reuters) - Asian shares eked out gains and
U.S. stock futures bounced back on Friday as hopes of more
government spending around the globe outweighed concerns about
rising coronavirus infections and worsening tensions between
Washington and Beijing.
European shares were also expected to rise, with
pan-European Euro Stoxx 50 futures STXEc1 , German DAX futures
FDXc1 , Britain's FTSE futures FFIc1 all up 0.1-0.2%. U.S.
stock futures rose 0.2%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS advanced 0.4%, paring some of its 2% losses the
previous day, while Nikkei .N225 slid 0.3% on concerns about
rising virus infections in Tokyo.
In China, the CSI300 index .CSI climbed 0.25%, clawing
back some of Thursday's 4.8% slide and shrugging off news that
Washington is considering banning travel to the United States by
all members of the Chinese Communist Party, which total more
than 90 million. Market watchers said investors are counting on U.S.
policymakers to adopt more stimulus measures as the world's
largest economy struggles to contain the epidemic, with some
existing programmes to support businesses set to expire within
weeks.
The U.S. Congress is set to begin debating such a package
next week, as several states in the country's south and west
implement fresh lockdown measures to curb the virus.
"You would think such sharp rises in infections would
normally lead to fall in stock prices but at the moment, that
was being offset by strong hopes for vaccines," said Tomo
Kinoshita, global market strategist at Invesco in Tokyo.
"But we now see higher risk of a market correction,
considering the improvement in hard economic data we have seen
over the past couple of months is likely to halt," he said.
While retail sales for June released on Thursday beat market
expectations, real-time measures of retail foot traffic and
employee working hours and shifts have flatlined after steady
growth since April. The U.S. labour market remained in dire condition. There
were 32 million people receiving unemployment checks under all
programmes in the last week of June, down from the prior week
but still the second-highest on record.

Overnight the S&P500 .SPX dropped 0.34% as investors
locked in gains from rallies in high-flying tech shares ahead of
earnings later this month.
Kicking off technology sector results, Netflix NFLX.O
skidded 9.1% after the bell as the company posted slower
subscriber growth than Wall Street's high expectations and
forecast a further slowdown in the pace of expansion in the
current quarter. In currencies, the euro hovered below the four-week high it
touched earlier this week, but stayed firm as European Union
leaders meet on Friday to seek to overcome differences over a
proposed stimulus package to kickstart economic growth stifled
by the coronavirus. On the table at a summit starting later in the day - their
first in-person talks around a table since the pandemic - are
the EU's 2021-27 budget and a new recovery fund worth 750
billion euros ($854 billion), which would mark a major step
towards fiscal integration in Europe.
While Dutch opposition and the threat of a Hungarian veto
weigh on chances for a deal, investors are pinning hopes on it
being a question of when, rather than if, a deal is struck.
"Whether they will come to an agreement today, or by the end
of this month, or by later this year is anybody's guess. But
there is a swell of hopes that you have seen at the start of the
euro trading," said Masaru Ishibashi, joint general manager of
trading at Sumitomo Mitsui Bank.
The euro fetched $1.1386 EUR= , unchanged on the day.
The yen was flat at 107.22 per dollar JPY= .
In commodities trading, oil prices were little changed with
Brent LCOc1 down 0.25% at $43.26 per barrel and U.S. crude
CLv1 down 0.15% at $40.87.
($1 = 0.8783 euros)

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