GLOBAL MARKETS-Shares worldwide look past lockdowns as U.S. election approaches

(Adds details, updates prices)
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* MSCI World index up 0.5%, Brent crude down 1.6%
* Attention turning to U.S. elections on Tuesday

By Danilo Masoni
MILAN, Nov 2 (Reuters) - Shares on Monday recovered globally
from one-month lows as strengthening factory data in China and
Europe offset news of new virus lockdowns, while investors
prepared for more volatility arising from the U.S. presidential
election.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.5% by 1310 GMT, following a
strong performance in Asia after data showed Chinese factory
activity expanded at its fastest pace in a decade. A boom in euro zone manufacturing in October helped Europe
leave behind a cautious start after the UK became the latest
country in the region to announce a fresh lockdown to fight a
second wave of COVID-19 infections.
Italy was also set to approve new restrictions in the coming
days but said it was holding back from re-introducing a
nationwide lockdown after such moves in France and Germany last
week caused a broad risk-off move across markets.
The pan-European FTSEurofirst 300 .FTEU3 benchmark, which
reached a five-month low last week, was last at its session
high, up 1.3%, also supported by hopes the lockdowns wouldn't
last as long as the previous round.
"Europe is facing up to a harsh winter ahead," Deutsche Bank
strategist Jim Reid said in a note. "The question to be asked to
all the European countries is can they come out of these
measures in some form towards the end of November/early December
as is hoped or will they be extended further."
The focus was increasingly shifting towards the U.S.
election on Tuesday, although investors prepared for the chance
that it could take a few days before the result becomes clear.
Republican President Donald Trump trails Democratic
challenger Joe Biden in national opinion polls, but polls in the
swing states that will decide the election show a closer race.

"Given the likelihood that the outcome of the presidential
election will be unclear on Wednesday, and possibly for much
longer, volatility could easily pick up and it might become a
severe roller-coaster ride," UniCredit strategists said.
Analysts are concerned that an uncertain outcome could cloud
the prospects for fiscal stimulus in the world's No. 1 economy
at a time when support is much needed. Also crucial for the size
of a possible stimulus will be which party wins the Senate.
The VIX volatility index .VIX , which rose to its highest
in four months last week, eased half a point to 37.5.
U.S. stock index futures ESc1 NQc1 rose around 1%,
indicating a clear recovery on Wall Street at the open following
its steepest weekly loss since March.
Despite the potential uncertainty, JP Morgan Cazenove equity
strategists led by Mislav Matejka sounded upbeat.
"Any clear result is likely to be seen as a positive, with
investors then able to look forward to a fiscal stimulus down
the line," they said.
"Stalemate/contested elections would lead to further
risk-off trading, but we believe that if such a scenario arises,
one should be using the weakness as an opportunity to add
exposure on a 3-6-month horizon," they added.
Meanwhile, the fresh lockdowns in Europe and parts of the
United States have raised concerns over the outlook for fuel
consumption. Brent crude LCOc1 prices fell to a low of $35.74
per barrel, a level not seen since late May. They later
recovered to trade down 1.6% at $37.33. U.S. crude went as low
as $33.64. O/R
Global coronavirus cases surged last week with Europe
crossing the bleak milestone of 10 million total infections. The
UK is grappling with more than 20,000 new cases a day while a
record surge in U.S. cases is killing up to 1,000 people a day.
In currencies, the UK pound GBP= fell 0.1% to $1.293 after
hitting its lowest in almost four weeks on news of the national
lockdown. The euro EUR= was broadly unchanged at $1.165.
The risk-sensitive Australian dollar AUD=D3 went below 70
U.S. cents for the first time since July before turning higher,
while the Japanese yen JPY= was flat at 104.62 per dollar.
That left the index that measures the dollar against a
basket of other currencies down 0.1% at 93.98. =USD .