GLOBAL MARKETS-New COVID-19 strain inflicts pain on equities and boosts dollar

* European and U.S. shares fall
* Pound hit on virus worries, lack of post-Brexit trade deal
* Dollar rises; oil, copper prices slide

By April Joyner
NEW YORK, Dec 21 (Reuters) - Equities around the world
tumbled on Monday, the dollar strengthened and oil prices
plunged as concerns about a new coronavirus strain in Britain
threatened to torpedo optimism over a vaccine-fuelled rebound in
economic growth.
On Wall Street, the benchmark S&P 500 .SPX stock index
fell 1.7%, while the pan-European STOXX index .STOXX plunged
2.6%. In both regions, travel and leisure stocks, which had been
expected to be among the biggest beneficiaries of an economic
reopening, fell sharply.
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
1.55%.
The new coronavirus strain, said to be up to 70% more
transmissible than the original, has put some 16 million Britons
under tougher lockdowns and prompted several countries to shut
their borders to the UK. Those developments overshadowed news
that the U.S. Congress had agreed upon $900 billion in
additional fiscal stimulus. Worries over the new strain lifted the greenback, which had
sunk to two-and-a-half-year lows last week, though it later
pared some gains. The dollar index =USD was last 0.11% higher.
On the other hand, the virus concerns as well as the lack of
a post-Brexit trade deal ahead of a Dec. 31 deadline weighed
heavily on the pound GBP=D3 . It was last 1.53% lower at
$1.3321.
The euro EUR= also dropped 0.37% to $1.221.
"The new strain of the coronavirus is really scaring
everyone, and we're seeing buying of the dollar across the
board," said Edward Moya, senior market strategist at OANDA in
New York.
Meanwhile, commodities that had been expected to benefit
from a growth upswing next year plunged on Monday.
Both Brent LCOc1 and U.S. crude CLc1 dropped more than
3% while copper CMCU3 fell off the $8,000-per-tonne mark it
recently scaled for the first time since 2013.
Even so, Emiel van den Heiligenberg, head of asset
allocation at Legal & General Investment Management, predicted
that expected vaccine rollouts would limit broad market
downside.
"A correction is justified but a very strong selloff would
surprise us ... because of the vaccine, by next March-April, we
should be able to think about normalisation again," he said.
On Wall Street, the Dow Jones Industrial Average .DJI fell
258.97 points, or 0.86%, to 29,920.08, the S&P 500 .SPX lost
57.89 points, or 1.56%, to 3,651.52 and the Nasdaq Composite
.IXIC dropped 193.35 points, or 1.52%, to 12,562.29.
Volatility in U.S. equities jumped as the indexes swooned.
The Cboe Volatility Index .VIX , known as Wall Street's "fear
gauge," hit its highest level since early November.
Safe-haven assets such as German and U.S. government bonds
also rallied. Benchmark 10-year U.S. Treasury notes US10YT=RR
last rose 5/32 in price to yield 0.933%, from 0.948% late on
Friday.
The yield curve between U.S. two-year and 10-year
Treasuries, a gauge of growth expectations, flattened slightly
U2US10=TWEB . It had risen to its steepest level in almost
three years on Friday amid optimism about the stimulus bill.
Gold XAU= , which usually rises during times of turmoil,
was little changed after falling as much as 1.3% earlier in the
session.

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