* MSCI world share index and euro hit highest since March
* EU seals recovery fund plan after marathon 5-day talks
* Virus vaccine trial results add to bullish mood
* Investors expect U.S. stimulus of more than $1 trillion
* Gold shines at 9-year high
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, July 21 (Reuters) - World shares and the euro hit
their strongest levels since March on Tuesday after European
Union leaders sealed a 750 billion euro ($857 billion)
post-pandemic stimulus plan after a marathon five-day meeting.
Hopes that vaccines against the COVID-19 disease might be
ready by the end of the year also supported the rally, following
promising early data from trials of three potential vaccines.
News of the EU deal, which includes 390 billion euros of
grants, down from an initially proposed 500 billion, along with
360 billion of low-interest loans, saw the euro EUR= climb to
as high as $1.1470 and the main European share indexes open more
than 1% higher. .EU FRX/
EU summit chairman Charles Michel presented the final plan
as a "pivotal" moment to dispel doubts about the bloc's unity
and future. "This agreement sends a concrete signal that Europe is a
force for action," a jubilant Michel told a news conference.
French President Emmanuel Macron, who spearheaded the deal with
German Chancellor Angela Merkel, hailed it as "truly historic".
Italian, Spanish, Greek, Portuguese and Cyprus' government
bonds rallied, reflecting that the countries will be allocated
some of the largest amounts from the new fund when scaled to the
size of their economies.
The Netherlands, Austria and Finland, which were part of a
group of five "frugals" that had been calling for stricter terms
for the funding, saw their borrowing costs inch higher.
GVD/EUR
"It's a pretty good message compared to other countries,"
Jefferies chief global equity strategist Sean Darby said,
referring to the outcome of the EU summit. "The markets should
take this news very well."
Wall Street futures ESc1 were also up, by 0.5%, after its
latest tech-led charge had pushed the Nasdaq .IXIC up 2.5% to
a record closing high, and the S&P500 .SPX to a five-month
peak on Monday. .N
Asian and Australian shares had followed suit, with MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS climbing 2% to its highest level since February.
Tokyo's Nikkei .N225 ended up a more modest 0.7% but the
Australian stock market .AXJO clocked up its best day in over
a month with a 2.6% jump. .T
The main all-world share indexes .MIWD00000PUS now have
rebounded 45% off their March lows, boosted mainly by the record
levels of stimulus announced by governments and central banks to
cushion the impact of COVID-19 and its ensuing lockdowns.
Early data from trials of three potential COVID-19 vaccines
released on Monday, including a closely-watched candidate from
Britain's Oxford University and one from CanSino Biologics
6185.HK and China's military research unit, also helped lift
markets.
The Oxford/AstraZeneca AZN.L vaccine is one of 150 in
development globally, but is considered the most advanced. In
its Phase I trial, the vaccine induced so-called neutralizing
antibodies - the kind that stop the virus from infecting cells -
in 91% of individuals a month after they were given one dose,
and in 100% of subjects who were given a second dose.
These levels were on a par with the antibodies produced by
people who survived COVID-19 - a key benchmark of potential
success.
GOOD AS GOLD
Commodity markets also had their tails up. Brent crude oil
LCOc1 was up 31 cents at $43.59, while U.S. crude (WTI) gained
19 cents to $41.00, though both were within July's tight $2-$3
trading range. O/R
Gold rose to a nine-year high on Tuesday as expectations of
higher inflation from increased stimulus overshadowed the
resultant gain in risk appetite, while silver breached the $20
level for the first time since September 2016.
Spot gold XAU= was up 0.4% at $1,822.11 per ounce by 0800
GMT, after hitting its highest since September 2011. U.S. gold
futures GCcv1 rose 0.4% to $1,823.80.
Gold tends to benefit from widespread stimulus as the metal
is widely viewed as a hedge against rising prices and currency
debasement. With the EU recovery plan now finalised, investor
focus is set to shift to possible further U.S. stimulus measures
after $3 trillion earlier this year. "What's really driving the gold market is stimulus and we
are going to get more of it. It's the eye candy that's driving
sentiment right now," said Stephen Innes, chief market
strategist at financial services firm AxiCorp.
($1 = 0.8747 euros)
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Potential allocation of EU recovery fund as share of GDP https://tmsnrt.rs/2OzVnME
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