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

* Stimulus deal partially offsets virus concerns in U.S.
stocks
* European shares end sharply lower
* Pound hit on lack of post-Brexit trade deal
* Oil, copper prices slide

By April Joyner
NEW YORK, Dec 21 (Reuters) - A gauge of equities around the
world fell on Monday and oil prices plunged as concerns about a
new coronavirus strain in Britain overshadowed optimism over a
vaccine-fueled rebound in economic growth.
U.S. stocks, however, trimmed their losses as investors also
weighed the benefits of a $900 billion fiscal stimulus deal
reached by Congress over the weekend. The benchmark S&P 500
.SPX was down only slightly after having fallen as much 2%
earlier. Financial stocks .SPSY also helped cap broader losses,
rallying more than 1% after the Federal Reserve said the largest
U.S. banks could resume stock buybacks. The dollar index =USD , which had risen earlier in the
session as investors sought refuge in the greenback, gave up its
gains and was last 0.28% lower.
"The initial sell-off was a knee-jerk reaction to the news
we saw in the UK," said Keith Lerner, chief market strategist at
Truist Advisory Services in Atlanta. "As the day goes on, people
are starting to sift through what's in the fiscal package. In
our view, it's underappreciated."
Still, MSCI's gauge of stocks across the globe
.MIWD00000PUS declined 0.63%.
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.
Worries over the new strain sent European stocks plunging.
The pan-European STOXX index .STOXX ended 2.3% lower.
In both Europe and the United States, travel and leisure
stocks, which had been expected to be among the biggest
beneficiaries of an economic reopening, fell.
The British pound GBP=D3 also tumbled on virus concerns,
as well as the lack of a post-Brexit trade deal ahead of a Dec.
31 deadline. It was last down 0.27% at $1.3482.
The euro EUR= traded slightly lower, too, down 0.07% to
$1.2246.
Meanwhile, commodities that had been expected to benefit
from a growth upswing next year plunged.
Both Brent LCOc1 and U.S. crude CLc1 dropped nearly 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, said
expected vaccine rollouts would limit broad market downside.
"A correction is justified but a very strong sell-off would
surprise us... because of the vaccine, by next March-April, we
should be able to think about normalization again," he said.
On Wall Street, the Dow Jones Industrial Average .DJI rose
92.77 points, or 0.31%, to 30,271.82, the S&P 500 .SPX lost
10.69 points, or 0.29%, to 3,698.72 and the Nasdaq Composite
.IXIC dropped 16.02 points, or 0.13%, to 12,739.62.
Volatility in U.S. equities jumped as the indexes swooned.
Though well off its highs in afternoon trading, the Cboe
Volatility Index .VIX , known as Wall Street's "fear gauge,"
was still on track for its largest one-day gain since late
October.
Safe-haven assets such as German and U.S. government bonds
also rose early on Monday, though Treasury yields, which move
inversely to prices, later pared losses.
Benchmark 10-year Treasury notes US10YT=RR were flat to
yield 0.9479%.
However, gold XAU= , which usually rises during times of
turmoil, fell on Monday. It was last down 0.2% to $1,876.61 an
ounce after falling as much as 1.3% earlier in the session.

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