GLOBAL MARKETS-Asian shares extend gains as investors count on stimulus, vaccines

* Asian shares rise more than 1%, Nikkei up 0.6%
* EU recovery fund deal seen within reach
* Investors expect U.S. stimulus of more than $1 trillion
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano and Elizabeth Dilts Marshall
TOKYO/NEW YORK, July 21 (Reuters) - Asian shares advanced on
Tuesday as prospects of a deal by European Union leaders to
jointly fund recovery of their economies and hopes for a
coronavirus vaccine lifted risk appetite.
Japan's Nikkei .N225 rose 0.6% while MSCI's broadest index
of Asia-Pacific shares outside Japan .MIAPJ0000PUS gained 1.5%
to edge near its four-month peak hit earlier this month.
On Wall Street, tech shares jumped after several days in the
doldrums, pushing the Nasdaq Composite .IXIC up 2.51% to a
record closing high on Monday. The S&P500 .SPX also hit a
five-month peak.
Euro Stoxx 50 futures STXEc1 gained 0.25% in Asian trade
to stand near their highest since early March.
European Union leaders appeared close to agreement on a
massive stimulus plan for their coronavirus-blighted economies,
with EU Council President Charles Michel voicing confidence
of reaching a deal on the 750 billion euro recovery fund.
"They are now discussing a compromise on how the fund will
be distributed between grants and loans. The question is no
longer whether we will have a fund or not," said Nobuhiko
Kuramochi, market strategist at Mizuho Securities.
"The U.S. will likely adopt stimulus by the first week of
August. We don't know its exact size but I bet it will be
something like $1 to $1.5 trillion."
Advisers to President Donald Trump and congressional
Democrats were set to discuss the next steps in responding to
the coronavirus crisis on Tuesday.
Although coronavirus infections have surged in recent weeks
in the country's south and west, investors hope another economic
package, which will come after $3 trillion in stimulus earlier
this year, will help the economy tide over a difficult period.
Hopes that vaccines against the COVID-19 disease might be
ready by the end of year also supported risk assets, following
promising early data from trials of three potential vaccines.

The positive mood, however, faces more reality checks later
this month as earnings season will be in full swing in many
countries in coming weeks.
"If companies give stronger guidance than market
expectations, that will be positive for stocks. But is that
really possible under the current uncertain environment?," said
Tatsushi Maeno, senior strategist at Okasan Asset Management.
"I think we need to be cautious about stock markets in the
near term."
In the currency market, the Chinese yuan inched up to hit
its firmest since early March, helped by recent signs of
recovery in the Chinese economy. The onshore yuan rose to as
high as 6.9804 per dollar CNY=CFXS .
The euro stood near Monday's four-month high of $1.14675 as
traders looked to the final outcome of the marathon EU summit
that started on Friday. It last traded at $1.1459 EUR= .
The yen was little moved at 107.19 to the dollar JPY= .
Gold held firm at $1,818 per ounce XAU= , having hit a
nine-year high of $1,820.4 on Monday.
The metal retains its strength as an ultimate store of value
as central banks around the world have committed themselves to
an unprecedented level of money-printing to shore up
pandemic-hit economies.
Brent crude LCOc1 ticked up 0.1% to $43.35 per barrel,
while U.S. West Texas Intermediate (WTI) CLv1 was flat at
$40.94.

(Editing by Jacqueline Wong)