GLOBAL MARKETS-Stocks edge up but gains limited by end of Fed stimulus

* U.S. Treasury pulls plug on stimulus
* Dollar up, U.S. Treasury yield slips
* Japan battling third wave
* Oil steadies, gold dips

By Tom Arnold and Swati Pandey
LONDON/SYDNEY, Nov 20 (Reuters) - World stocks edged higher
Friday as hopes of economic recovery ahead helped offset the
blow dealt by news that the U.S. Treasury was ending emergency
loan programmes.
But gains were modest as flare-ups in virus cases around the
world continued to dampen sentiment. California announced fresh
curfews to try to fight surging coronavirus infections, while
Japan is facing a third wave of the virus, and parts of Europe
are already under recently renewed social restrictions.
Europe's STOXX 600 edged 0.3% higher in early trading, while
the global stocks index .MIWD00000PUS was also 0.1% firmer and
on course for its third weekly gain in a row.
S&P500 ESc1 futures slipped 0.4% while Dow futures 1YMc1
fell 0.4%, cancelling out a firmer lead from a strong Wall
Street session overnight.
The dollar =USD edged up and the 10-year Treasury yield
US10YT=RR slipped to the lowest in 10 days at 0.818%, before
marginally recovering in later trading. In Asia, Japan's Nikkei .N225 stumbled 0.4%, weighed down
by a rise in new domestic coronavirus infections to record
highs. Chinese shares were 0.3% stronger.
That left MSCI's broadest index of Asia-Pacific shares
excluding Japan .MIAPJ0000PUS up 0.4%.
In a letter to U.S. Federal Reserve Chair Jerome Powell,
U.S. Treasury Secretary Steven Mnuchin said the $455 billion
allocated to Treasury under the CARES Act should be instead
available for Congress to reallocate. Although the programmes were not used extensively, Fed
officials felt their presence reassured financial markets and
investors that credit would remain available to help businesses,
local agencies and even nonprofits through the pandemic
downturn.
Mnuchin's decision added to market anxiety about broader
economic growth as data shows the early fast recovery from a
historic plunge in the U.S. economy is fading, with more than 10
million who had jobs in January still out of work.
"Despite those developments the fact the market is able to
resist to this extent means there is some sun ahead, driven by
the fact that in medium term economic activity will accelerate
and there is positive news o the vaccine," said François Savary,
chief investment officer at Swiss wealth manager Prime Partners.
Investor sentiment was also hit by data that showed COVID-19
hospitalisations across the United States jumped by nearly 50%
in the last two weeks, threatening the recovery of the world's
largest economy as cities and states began to impose lockdowns.
California on Thursday imposed a curfew on social gatherings
and other non-essential activities in one of the most intrusive
of the restrictions being ordered across the country to curb an
alarming surge in infections. All three major U.S. stock indexes, however, got a healthy
boost overnight after Senate Democratic Minority Leader Chuck
Schumer said Republican Majority Leader Mitch McConnell had
agreed to revive talks to craft a new fiscal relief package.

In Europe, investors clung to signs of progress on
coronavirus vaccines.
The European Union could pay more than $10 billion to secure
hundreds of millions of doses of the vaccine candidates being
developed by Pfizer-BioNTech and CureVac, an EU official
involved in the talks told Reuters. In currencies, the dollar index was at 92.335, flat on the
day after it slipped overnight then picked up again as European
markets opened =USD . L1N2I60G8
The euro was flat against the dollar, at $1.18725 EUR=EBS ,
on track for a small weekly gain, while the Australian dollar is
having its best month versus the U.S. dollar since April, in
terms of percentage change AUD=D3 .
In commodities, oil prices steadied after losses the
previous day, when concerns about coronavirus lockdowns
affecting fuel demand weighed on the market. O/R
The U.S. West Texas Intermediate (WTI) January crude
contract CLc2 dipped 4 cents to $41.86 a barrel. Brent crude
LCOc1 was up 2 cents at $44.22.
Gold XAU= fell 0.1% to $1,866.19 per ounce.

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