GLOBAL MARKETS-Stocks fall on renewed virus fears, Powell speech in focus

* Equities lose ground on virus woes
* Treasuries eye Powell speech
* Oil futures falter in Asia

By Stanley White and Suzanne Barlyn
TOKYO/NEW YORK, May 13 (Reuters) - Stocks and oil prices
fell on Wednesday as fears about a second wave of coronavirus
infections gripped financial markets.
Investors, many facing steep losses due to the
pandemic-driven shakeout in assets over the past few months,
have also had to contend with renewed U.S.-China trade tensions.
Leading U.S. infectious disease expert Anthony Fauci on
Tuesday warned lawmakers that a premature lifting of lockdowns
could lead to additional outbreaks of the deadly coronavirus,
which has killed 80,000 Americans and brought the economy to its
knees. Fauci's comments hammered Wall Street stocks overnight,
underlining fragile investor sentiment which has in recent
sessions swung between optimism over some easing in lockdowns
globally and anxiety about a fresh spike in virus cases.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was down 0.4%. Shares in China .CSI300 , where
the coronavirus first emerged late last year, fell 0.5%.
The South Korean market .KS11 was down for a third
session. New coronavirus infections have appeared in Seoul after
the country eased restrictions last week.
Oil markets, which have plummeted this year due to a
combination of a collapse in demand and a supply glut, lost
further ground in Asia.
Treasury yields also inched lower amid caution before a
speech by U.S. Federal Reserve Chairman Jerome Powell and rising
speculation the United States could one day adopt negative
interest rates. "It looks like we're in for another negative day of trading
here in the Asia Pacific region," said Michael McCarthy, chief
market strategist at CMC Markets in Sydney. "It's very clear
that the containment has done economic damage and the recovery
will take years and not weeks," he said.
U.S. stock futures, the S&P 500 e-minis ESc1 , were down
0.4% in Asian trade.
In overnight trade, Wall Street shares were dragged lower
after Fauci's remarks, including his statement that a treatment
or vaccine is unlikely to be in place by late August or early
September. The Dow Jones Industrial Average .DJI fell 1.89% on
Tuesday, the S&P 500 .SPX lost 2.05% and the Nasdaq Composite
.IXIC dropped 2.06%.
The mood was further soured by proposed legislation by a
leading U.S. Republican senator that would authorize President
Donald Trump to impose sanctions on China if it fails to give a
full account of events leading to the outbreak of the novel
coronavirus. Stock markets have rebounded sharply in recent weeks as the
spread of the novel coronavirus slowed in some countries in Asia
and Europe, while parts of the U.S. economy began to reopen
after weeks of lockdowns.
Equities and some riskier assets are starting to erase some
of those gains due to worries that a rush to re-open factories
and shops may be premature.
Australian shares .AXJO were down 1%, while Japan's Nikkei
stock index .N225 slid 0.8%.
The yield on benchmark 10-year Treasury notes US10YT=RR
eased slightly to 0.6622%. The two-year yield US2YT=RR fell to
0.1589% but remained above a record low of 0.1050% hit on
Friday.
The New Zealand dollar NZD=D3 slumped 0.7% to $0.6030
after the country's central bank doubled its quantitative easing
programme and said it has asked commercial banks to be ready for
negative interest rates by year's end.
The U.S. dollar nursed losses as traders braced for Powell's
speech, which will cover economic issues and may offer a hint
whether negative rates are a viable policy option.
Trump on Tuesday again pushed the Fed to adopt negative
interest rates, a hot topic in financial markets since last week
when U.S. money market instruments started to price in a chance
of negative rates.
U.S. consumer prices dropped 0.8% in April, the biggest
since the Great Recession, raising the spectre of deflation.
Oil futures fell in Asia as worries about the virus overcame
hope that output cuts will put a floor under prices.
U.S. crude CLc1 dipped 1.63% to $25.36 a barrel. Brent
crude LCOc1 fell 2.03% to $29.37 per barrel.

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