GLOBAL MARKETS-Stocks try to shake off second wave virus fears

* S&P 500 futures erase early gains but second wave fears
persist
* Gold near 7-1/2-year peak touched last month
* Hong Kong in focus after China reveals details of security
law
* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Hideyuki Sano
TOKYO, June 22 (Reuters) - U.S. stock futures erased losses
and Asian stocks held flat on Monday, trying to shake off
worries that rising coronavirus cases in the United States could
scupper a quick economic rebound from the massive downturn
triggered by the pandemic.
U.S. S&P 500 futures ESc1 rose 0.4%, having erased early
losses of 1.05% while Japan's Nikkei .N225 also eked out gains
of 0.1%, similarly recovering from early losses.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was almost flat while mainland Chinese stocks
.CSI300 ticked up 0.3% to 3-1/2-month highs.
After a brutal sell-off earlier this year, share prices had
risen globally over the past three months, helped by massive
stimulus around the world and hopes the worst of the pandemic
was over.
"The market is surprisingly resilient. Perhaps many
investors think the uptrend is in place. But we need to keep an
eye on rising coronavirus infections in some countries," said
Hirokazu Kabeya, chief global strategist at Daiwa Securities.
Highlighting economic challenges from the impact of social
restrictions to contain the pandemic, Apple Inc AAPL.O said on
Friday it would temporarily shut 11 U.S. stores as coronavirus
cases rise in some states, triggering selling in stocks.
Data from Johns Hopkins University shows new U.S. cases on
Saturday hit the highest since early May.

"The second wave is becoming a theme for markets. The
increase in states such as Florida and South Carolina is big
enough to be labelled as second wave," said Yoshinori Shigemi,
global strategist at JPMorgan Asset Management.
"Whether there will be a lockdown may vary depending on
region. It will be a tough decision for politicians. But they
probably have no other choice if they are running out of
hospital beds," he said.
The pandemic is accelerating globally with the World Health
Organization (WHO) reporting a record increase in global
coronavirus cases on Sunday. "The market has been pricing in a rapid recovery so I doubt
there are much upside gains to be made. We now need to see
whether the earnings outlook will meet up with expectations,"
said Takuya Hozumi, investment strategist at Mitsubishi UFJ
Morgan Stanley Securities.
The world's shares are now traded at the most expensive
levels since 2002 compared with projected earnings in the coming
12 months.

Investors are also wary of developments in Hong Kong after
details of a new security law for the territory showed Beijing
will have overarching powers on its enforcement.
China's top legislative body, the National People's Congress
Standing Committee, will meet on June 28, and the Global Times
reported it would likely enact the Hong Kong security law by
July 1. Hong Kong's Hang Seng .HSI fell 0.3% in early trade,
underperforming regional markets.
In currencies, major currencies were mostly steady.
The euro traded at $1.1187 EUR= , near its lowest in nearly
three weeks.
The yen changed hands at 106.88 per dollar JPY= , not far
from a one-month high of 106.58 to the dollar hit earlier this
month.
Concerns about the pandemic sent gold XAU= 0.8% higher to
$1,757.2 per ounce, near its May peak of $1,764.8, which was its
strongest since October 2012.
Oil prices firmed slightly on tighter supplies from major
producers, but concerns that a record rise in global coronavirus
cases could curb a recovery in fuel demand checked gains.
Brent crude LCOc1 rose 0.6% to $42.44 a barrel while U.S.
crude CLc1 was at $40.05 a barrel, up 0.6%.

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(Editing by Sam Holmes and Jacqueline Wong)