* World stocks start quarter higher
* U.S. futures extend gains as U.S. stimulus talks progress
* Tokyo trading halted by system glitch
* Uncertainties over U.S. election cloud outlook
(updates ahead of U.S. open)
By Marc Jones
LONDON, Oct 1 (Reuters) - Renewed U.S. stimulus hopes lifted
global markets on Thursday, though an all-day outage on Tokyo's
Nikkei and a Brexit legal row ensured a bumpy start to what
could be an explosive fourth quarter.
Europe's STOXX 600 index .STOXX and the euro EUR=
clocked 0.7% and 0.2% gains, respectively, as data showing the
region's ongoing economic recovery from its coronavirus slump
helped traders claw back some of September's heavy falls.
.EU
It was a wild ride for sterling. News that the European
Union had launched a legal case against Britain for undercutting
their earlier divorce deal sent it tumbling only
to then pinball higher on a Financial Times tweet that the two
sides had made some progress in trade talks.
Elsewhere things were calmer. The dollar =USD eased to a
one-week low after robust U.S. data on Wednesday the stimulus hopes leading traders back to riskier
currencies EMRG/FRX and pushing up Wall Street futures.
GVD/EUR O/R
With U.S. elections, as well as the potential for a
COVID-19 vaccine and a no-deal Brexit all lying ahead, markets
are likely seeing the lull before the storm, according to Chris
Dyer, Eaton Vance's director of global equity.
"What I have been saying is that the equity markets are
likely to move violently sideways in the next few months," he
said, though in 12 months the trajectory should be a brighter
one of global recovery.
Asian trading saw a 0.4% rise on MSCI's regional index
.MIAPJ0000PUS , led by 1.1% and 1.5% gains in Australia and
India. The day had been dominated, though, by the unprecedented
technical problems at Tokyo Stock Exchange, the world's
third-largest stock market. TSE President Koichiro Miyahara apologised for the all-day
outage. He said the exchange had decided to suspend the full
session because an early resumption could cause market
confusion, but it planned to restart on Friday.
Tokyo Governor Yuriko Koike said a quick fix was crucial to
ensure trust in the roughly $6 trillion market.
The timing is really just bad," said Takashi Hiroki, chief
strategist at brokerage Monex in Tokyo, adding that many market
participants had been hoping to cash in on the overnight rise in
U.S. markets.
The meltdown also coincided with the release of the Bank of
Japan's closely watched tankan corporate survey, which showed
business sentiment improved from a decade low.
"The market was robbed of that chance," Hiroki added.
AIRLINES CLIMB
S&P500 futures ESc1 rose 0.8%, extending Wall Street's
rebound amid strong employment data and talk of progress on
long-delayed COVID-19 relief legislation from U.S. Treasury
Secretary Steven Mnuchin and House Speaker Nancy Pelosi. .N
With a $20 billion lifeline for the battered airline
industry part of a potential $1.5 trillion package, American
Airlines AAL.O , Delta DAL.N , United Airlines UAL.O and
JetBlue JBLU.O shares climbed 1.3%-3.6% in premarket trading.
COVID-19 vaccine developments underpinned market sentiment
too, despite rising infection rates in both Europe and the
United States and a global death toll now above 1 million.
Back in the currency markets, the dollar's slip after its
best month since July 2019 lifted the Australia's
trade-sensitive dollar 0.5% to $0.72 AUD=D4 and Mexico's peso
MXN= more than 1%.
"The U.S. election is clearly a dollar (sensitive) event as
is a stimulus bill," said Simon Fennell at William Blair Global
Equity, adding that both had the possibility to drive the dollar
weaker.
After the "hard stop" caused by forced lockdowns, the
global economy was hopefully "coming out the other side" he
added. "That is why these discussions on second lockdowns are so
important".
In commodities, gold gained 1% after its worst month since
November 2016 while oil prices were subdued after their 10%
September drop, with U.S. crude futures at $39.91 per barrel
CLc1 and Brent futures at $42.33 a barrel LCOc1 .
"Increasing supplies from OPEC+ will be risking the
rebalancing effort as the market is still grappling with weak
demand," ANZ Research said.
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