* Stocks tumble back as tougher COVID-19 curbs gather pace
* Little sign of breakthrough in UK-EU trade talks
* Hopes for pre-election U.S. fiscal package fizzle out
By Huw Jones
LONDON, Oct 15 (Reuters) - - Global shares fell on Thursday
as governments across Europe tightened restrictions to battle an
accelerating second wave of COVID-19 infections, dampening the
prospects for economic recovery.
Stocks in Europe fell for a third consecutive session in
early trading, taking their queue from weaker markets in Asia
overnight, and a Wall Street pulled lower on Tuesday by Amazon
and Microsoft as the earnings season gathered momentum.
Analysts said the rise in coronavirus infections across
Europe and no sign of a vaccine anytime soon after two high
profile propects experienced problems was hitting sentiment.
Hopes for a U.S. package to boost the coronavirus-hit
economy before the presidential election next month have also
fizzled out after U.S. Treasury Secretary Steven Mnuchin said
such a deal would be difficult.
"In Europe you just have a long list of quite notable
actions being taken, with Paris and other French cities going
into curfew, and today reports that London is going to the next,
high level phase of restrictions," said Derek Halpenny, head of
research at MUFG.
"It's all pointing to a greater hit to fourth quarter
activity and warrants a degree of adjustment in market pricing."
The pan-European STOXX 600 .STOXX was down 1.7% to a near
two-week low, with markets in London .FTSE and Paris .FCHI
lower 1.4%-1.7% and Frankfurt .GDAXI and Milan .FTMIB
2%-2.5% weaker.
"We have been trading in a range for quite some time and up
until the beginning of this week, at the top end of it, and it's
a trend that is likely to continue," said Michael Hewson, senior
market analyst a CMC Markets.
BREXIT ON EU SUMMIT MENU
A two-day summit of European Union leaders starts on
Thursday as the EU and Britain continue their efforts to
overcome stumbling blocks, such as fishing rights and
competition safeguards, to agreeing a trade deal before the UK's
Brexit transition arrangements end on Dec. 31. British Prime Minister Boris Johnson had said he would walk
away from the talks if there was no deal by Oct. 15, but this
threat has now eased.
"Today is unlikely to be 'doomsday' for the British pound,
as talks are expected to go on between the UK and EU negotiators
beyond the supposed 15 October deadline," UniCredit bank said in
a note to clients. The pound barely budged whereas the euro was
a touch lower against the dollar at $1.1726. GBP=D3
Investors will tune into European Central Bank President
Christine Lagarde, who takes part in a debate on the global
economy at 1600 GMT as part of the IMF and World Bank's annual
meeting which is being held virtually.
No major euro zone economic data is expected, but in the
United States markets will take stock of the latest jobless
claims figures.
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan .MIAPJ0000PUS lost 0.6% while Japan's Nikkei
.N225 dropped 0.5%.
U.S. S&P 500 futures ESc1 were pointing to a 0.6% drop
while the Nasdaq equivalent sank 1.2%. On Wednesday, the S&P 500
.SPX closed down 0.7% and the Nasdaq Composite Index .IXIC
shed 0.8%.
With traders seeking safety again, Germany's government
bonds rallied to leave their yields at their lowest level since
the March spread of COVID-19 caused the global meltdown in stock
markets and other riskier assets. DE10YT=RR . GVD/EUR
Oil prices also fell as the renewed surge in the virus in
large parts of the world underpinned concerns about economic
activity.
Brent crude LCOc1 futures dropped 0.8% to $42.96 a barrel,
U.S. West Texas Intermediate (WTI) crude CLc1 futures dropped
back to $40.68 a barrel while gold XAU= and industrial metals
like copper /MCU3=LX were broadly flat.