GLOBAL MARKETS-Asian shares defensive; eyes on EU summit, U.S. stimulus talks

* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Asian shares mixed, sentiment cautious
* Eyes on fiscal support package talks in EU, US

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.

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