* World shares set record highs as Europe rises
* Dollar adds to gains, euro batted back to $1.18
* China's Caixin shows sustained services sector recovery
* U.S.-China trade tensions in focus
* Rouble struggles with sanctions worries
By Marc Jones
LONDON, Sept 3 (Reuters) - Europe kept record high world
share indices creeping forward on Thursday, while European
Central Bank efforts to tame the euro lifted the dollar and
government bond markets higher.
The promise of ongoing global fiscal and monetary stimulus
remained too powerful to allow the worries about second
coronavirus waves or deteriorating U.S.-China and EU-Russia
relations to rein in the bulls.
The pan-European STOXX 600 index .STOXX gained almost 1%
.EU , tracking Wall Street's latest peaks and overnight gains
in Asia after data there showed China's service sector grew for
a fourth straight month in August. It kept the MSCI's broadest index of world shares, which
tracks nearly 50 countries, at a record high. The index has
gained nearly 60% since collapsing in February and March when
the novel coronavirus was beginning to spread globally.
Wall Street futures ESc1 were a fraction lower despite a
sharper than expected fall in jobless benefit claims
.N but its roar up has been remarkable.
Apple's $2 trillion price tag is now larger than the entire
FTSE 100, $500 billion electric carmaker Tesla's is worth
roughly as much as the other auto majors combined, while the
Nasdaq's market cap has risen $1.6 billion an hour on average
since March.
"The U.S. equity market just seems to go politely ploughing
on and the U.S. dollar is still correcting," said Societe
Generale strategist Kit Juckes.
"I think you would have to get euro-dollar down through 1.17
before the U.S. equity market - which is probably the most
overstretched of all time - might start paying attention and
think something was correcting more seriously."
The dollar's bounce put it about 1.3% above the 28-month low
it had hit against major world currencies on Tuesday. It was
also on track for its first unbroken three-day gain since May.
/FRX
The euro slipped 0.4% to $1.1803 EUR= , helped on its way
by a Financial Times report that several ECB members were
concerned that the euro's rise, which saw it touch $1.20 this
week, could hamper the region's economy.
That followed remarks on Tuesday from ECB's chief economist
Philip Lane, who said the exchange rate "does matter" for
monetary policy.
Westpac currency strategist Sean Callow said the FT report
was "stoking some interest in next week's ECB meeting at the
very least," while MUFG's Lee Hardman reckoned the bank would
"rely more on jawboning" for now rather than action.
Nevertheless, short-dated German bond yields - which move
inversely to the asset's price - dropped to their lowest in
nearly a month as a survey showed the euro zone's rebound
faltered in August. GVD/EUR
Growth in the bloc's dominant service industry almost
ceased, suggesting the road to post-COVID recovery will be
bumpy.
It "sends a disappointing signal that the rebound has lost
almost all momentum," said Chris Williamson, chief business
economist at IHS Markit which compiles the Purchasing Managers'
Index (PMI) data.
ROUBLE RUMBLED
Traders also had much to ponder in Asia and beyond.
Reports China was planning sweeping policy changes to its
semiconductor industry to fight U.S. restrictions stoked
concerns about deteriorating relations between the world's two
biggest economies.
China's blue-chip index .CSI300 closed 0.55% lower, while
Hong Kong's Hang Seng .HSI fell 0.45% and the Aussie and Kiwi
dollars AUD= NZD= buckled to take some of the shine off
gains of 0.9% and 1.3% in Tokyo .N225 and Seoul .KS11 .
The China chip talk came after the United States said on
Wednesday it would require senior Chinese diplomats to get State
Department approval before visiting U.S. university campuses or
holding cultural events with more than 50 people outside mission
grounds. Shares of Chinese gaming and social media powerhouse Tencent
0700.HK had also fallen more than 2% after India banned 118
mobile apps, including the firm's popular PUBG game, adding to
its bans on TikTok, WeChat and UC Browser. Russia's rouble struggled after shedding 2.6% on Wednesday
when Germany said Kremlin critic Alexei Navalny had been
poisoned with a Soviet-style Novichok nerve agent, the same
substance Britain said was used against a Russian double agent
and his daughter in an attack in England in 2018.
German Chancellor Angela Merkel said Berlin expected Moscow
to explain itself and that Germany would consult its NATO allies
about how to respond, raising the prospect of new Western
sanctions on Russia.
Among commodities, Brent crude LCOc1 fell nearly 2% to
$43.54 per barrel and U.S. oil CLc1 dropped just over 2% to
$40.63 a barrel on expectations of weaker U.S. gasoline demand
and a sluggish global recovery. Gold was slightly lower, with
spot prices XAU= at $1933.98 an ounce. GOL/
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Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Rouble tumbles https://tmsnrt.rs/31Rndf5
World stocks vs coronavirus https://tmsnrt.rs/3lIrlpw
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