* Biden unveils $1.9 trillion stimulus plan
* Resurgence of virus cases in China weigh
* U.S. imposes ban on nine more Chinese firms
* Powell sees no reason to alter Fed's stance
* Oil falls, gold rises on U.S. stimulus
By Tom Arnold and Andrew Galbraith
LONDON/SHANGHAI, Jan 15 (Reuters) - Global shares stumbled
on Friday as hopes of a fiscal boost provided by a $1.9 trillion
U.S. stimulus plan were smothered by the prospect of stricter
lockdowns in France and Germany and a resurgence of COVID-19
cases in China.
European stocks followed Asian markets lower, with the
pan-European STOXX 600 .STOXX down 0.4% and London's FTSE 100
.FTSE 0.6% weaker, with the latter clobbered by data showing
Britain's economy shrank in November for the first time since
the initial COVID-19 lockdown last spring as social-distancing
rules tightened. The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was 0.2% lower. S&P 500 e-mini futures
EScv1 shed 0.3% to 3,779.
Earlier on Friday, an Asian regional share index had edged
near record highs after U.S. President-elect Joe Biden proposed
a $1.9 trillion stimulus plan to jump-start the world's largest
economy and accelerate its response to the coronavirus.
In prime-time remarks, Biden outlined a proposal that
includes $415 billion aimed at the COVID-19 response, some $1
trillion in direct relief to households, and roughly $440
billion for small businesses and communities hard hit by the
pandemic. But that initial boost later faded as risk appetite waned,
lifting bond prices and the dollar, and hitting equities.
"People are saying it's a big number but markets are almost
acting like its a disappointment," said James Athey, investment
director at Aberdeen Standard Investments.
"I think maybe the market was pricing an additional $2,000
cheque going to the U.S. population, but what's being proposed
is a top-up of $1,400 to take the total to $2,000 because $600
has already been agreed."
Investors also digested the prospect of rising taxes to pay
for the plan.
"The concern is what it's going to mean from a tax stand
point," said Tim Ghriskey, chief investment strategist at
Inverness Counsel in New York.
"Spending is easy to do but the question is how are you
going to pay for it? Markets often ignore politics but they
don't often ignore taxes."
RECOVERY PROSPECTS
Biden's comments came after Federal Reserve Chair Jerome
Powell struck a dovish tone in comments at a virtual symposium
with Princeton University.
Powell said the U.S. central bank is not raising interest
rates anytime soon and rejected suggestions the Fed might start
reducing its bond purchases in the near term. Investor concerns over the prospects for a global economic
recovery were raised after France strengthened its border
controls and brought forward its night curfew by two hours to 6
p.m. for at least two weeks to try to slow the spread of
coronavirus infections, while Germany Chancellor Angela Merkel
called for "very fast action" to counter the spread of variants
of the coronavirus. Chinese blue chips .CSI300 eased 0.2%, snapping a
four-week winning streak, after on Friday the country reported
the highest number of new COVID-19 cases in more than 10 months.
Sentiment was also soured by a further strain in Sino-U.S.
relations after the Trump administration imposed sanctions on
officials and companies for alleged misdeeds in the South China
Sea and an investment ban on nine more firms. On Friday, U.S. earnings season will kick into full swing
with results from JPMorgan JPM.N , Citigroup C.N and Wells
Fargo WFC.N . Investors will be looking to see if banks are
starting to take down credit reserves, resume buybacks, and
provide guidance that shows the economy is improving, said
Thomas Hayes, chairman of Great Hill Capital in New York.
In the currency market, the U.S. dollar rose.
The dollar index was at 90.458 versus a basket of
currencies, up 0.2% on the day =USD . It was on track for a
weekly gain of around 0.4%, making this its strongest week since
November.
Against the stronger dollar, the euro was down 0.3% at
$1.2121 EUR=EBS . U.S. yields stepped back as risk appetite waned. Benchmark
10-year Treasury notes US10YT=RR yielded 1.1107%, down from a
U.S. close of 1.129% on Thursday, while the 30-year yield
US30YT=RR dipped to 1.8500% from 1.874%.
Oil prices, which had risen on a weak dollar and strong
Chinese import data, dropped as COVID-19 concerns in China hit
sentiment. O/R
Brent crude oil futures LCOc1 fell 1.2%, to $55.71 a
barrel while U.S. crude CLc1 lost 0.9% to $53.11.
Spot gold XAU= rose 0.2% to $1,850.16 per ounce.
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Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country World Index Market Cap http://tmsnrt.rs/2EmTD6j
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