RPT-GLOBAL MARKETS-Asian stocks set to fall on growing second virus wave fears

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By Herbert Lash and Suzanne Barlyn
NEW YORK, May 11 (Reuters) - Asian equities and oil prices
were set to slip on Tuesday amid growing investor worries about
a second wave of coronavirus infections after the Chinese city
where the pandemic originated reported its first new cases since
its lockdown was lifted.
The central Chinese city of Wuhan reported five new
confirmed cases on Monday, casting doubts over efforts to lower
coronavirus-related restrictions across the country as
businesses restart and individuals went back to
work. Hong Kong's Hang Seng index futures .HSI .HSIc1 were
down 0.68% while Japan's Nikkei 225 futures NKc1 were off
0.1%.
"My feeling is that it will be flat to slightly down across
Asia," said Shane Oliver, head of investment strategy and
economics for AMP Capital in Sydney, citing concerns about
coronavirus clusters and a potential second wave.
Australian S&P/ASX 200 futures YAPcm1 fell 0.35%.
The S&P 500 barely closed higher on Wall Street, but the
Nasdaq posted its sixth consecutive advance as technology and
healthcare shares provided the biggest lift to all three major
U.S. stock indexes.
The Nasdaq is now within 10% of its all-time high reached in
February.
A jump in coronavirus cases in South Korea and Germany
weighed on Wall Street sentiment even amid signs more parts of
the United States could soon emerge from lockdowns.
A second wave of infections would likely snuff out the
recent rally in equity markets and lead investors to position
for a severe and prolonged global recession.
There were some positive cues for markets with China
reporting April credit growth accelerated to 12% from a year
ago, a sign that the recovery from a collapse in the first
quarter remained intact, the National Australia Bank said in a
report. MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.04% following broad declines in Europe.
On Wall Street, the Dow Jones Industrial Average .DJI fell
0.45%, the S&P 500 .SPX gained 0.01% and the Nasdaq Composite
.IXIC added 0.78%.
The dollar, defying its typical safe-haven status, rose on
Monday, even as investors added risk to their portfolios, buying
U.S. stocks and selling Treasuries.
Investors in FX markets had mixed risk expectations, with an
eye on warnings of a second wave of COVID-19 infections as more
countries eased lockdown restrictions.
Bond markets signaled that a global economic recovery will
be slow. Two-year U.S. government bond yields US2YT=RR have
hit record lows at 0.105% and Fed fund futures 0#FF: last week
turned negative for the first time ever. US/
Benchmark 10-year notes US10YT=RR last fell 11/32 in price
to yield 0.7147%, from 0.681% late on Friday.
In commodity markets, oil prices slid as the pandemic eroded
global demand. O/R
U.S. crude CLc1 recently fell 0.08% to $24.72 per barrel
and Brent LCOc1 was at $30.09, down 2.84% on the day.

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