GLOBAL MARKETS-Dollar falls, European shares bounce back in 'relief rally'

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By Elizabeth Howcroft
LONDON, Sept 28 (Reuters) - European shares rebounded on
Monday and the dollar fell from two-month highs as market
sentiment recovered briefly, although investors remain cautious
about both the second wave of COVID-19 in many regions and the
Nov. 3 U.S. presidential election.
Equities fell sharply last week and the dollar hit a
two-month high as coronavirus infections surged again in Europe
and as investors reassessed their expectations for a global
economic recovery ahead of the U.S. vote.
But on Monday, shares were firmly in the black, with the
Stoxx 600 up 2% .STOXX , London's FTSE 100 up 1.5% .FTSE and
Germany's DAX up 2.8% .GDAXI at 1151 GMT. After a tech-driven rally in Wall Street late on Friday,
Asian shares gained, with Chinese shares boosted by data over
the weekend showing China's industrial firms grew for the fourth
consecutive month in August. The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.7% at 1152 GMT, while
MSCI's main European Index .MSER was up 2.2%.
"We're seeing a bit of a relief rally," said Jonathan Bell,
chief investment officer at Stanhope Capital. "Things got
over-sold perhaps a little bit in the short term."
"We saw quite a lot of exuberance in July and August with
prices particularly of tech stocks rising and that then has come
off a little bit recently," he said.
Bell said that the move lower was unlikely to result in a
rotation away from technology and growth stocks until there was
a more significant driver such as a COVID-19 vaccine or signs of
inflation picking up.
He said politics remains a key driver for investors ahead of
the Nov. 3 U.S. vote pitting President Donald Trump against
former vice-president Joe Biden.
The STOXX 600's banking stock index was up 4.4%, after
hitting a fresh all-time low on Friday .SX7P .
U.S. stock futures rose, with banking and travel firms'
shares rebounding. Dow e-minis 1YMcv1 were up 1.3% at 1200 GMT, S&P 500
e-minis EScv1 were up 1.4% and Nasdaq 100 e-minis NQcv1 were
up 1.8%.
Currency markets indicated increased risk appetite, as the
riskier Australian dollar AUD=D3 , New Zealand dollar NZD=D3 ,
Swedish crown SEK=D3 and Norwegian crown NOK=D3 were all up
against the U.S. dollar, recouping some losses from the previous
week. The dollar index fell, erasing some of last week's gains,
down 0.4% on the day at 94.157 at 1154 GMT =USD .
The euro was up 0.4% versus the dollar, at $1.1672
EUR=EBS .
The benchmark 10-year German Bund yield was up 2 basis
points, at -0.509% DE10YT=RR . Investors remain broadly cautious in light of rising new
COVID-19 infections in Europe, which pose the risk of further
restrictions on activity. The World Health Organization said on Friday that it is
worried about rising infections and hospitalisations ahead of
the Northern Hemisphere's flu season. Oil prices fell as the increasing virus cases damaged hopes
for a smooth recovery in fuel demand, with the main crude
benchmarks on track for their first monthly falls since
April Gold prices slipped, with spot gold XAU= down 0.3% at
$1,864.98 per ounce by 1157 GMT.
"Rather than marking the start of a further decline, we
think gold's fall is a temporary correction," UBS wrote in a
note to clients.
"We think investors should use the drop in gold prices to
add exposure to it. By year-end 2020, we see the precious metal
again reaching the USD 2,000/oz mark," the note said.
The first debate between U.S. presidential candidates on
Tuesday. President Donald Trump paid just $750 in federal income
taxes in both 2016 and 2017, the New York Times reported on
Sunday, citing tax-return data. Trump dismissed the report as
"fake news". Global manufacturing PMIs on Thursday and U.S. jobs data on
Friday will also be in focus this week. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
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world stocks vs covid cases https://tmsnrt.rs/2FZRIHE
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