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* European stocks open lower
* Oil prices relatively stable
* Gold at 9-yr peak on safe-haven demand
* China blue-chip stocks close at five-year high
* World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Arnold and Swati Pandey
LONDON/SYDNEY, July 8 (Reuters) - Global stocks faltered on
Wednesday as an increase in new coronavirus cases in some parts
of the world undermined prospects for a quick economic recovery.
Frankfurt, Paris and London all
opened lower as investors shifted to wait-and-see mode before
upcoming earnings and clung to the perceived safety of the U.S.
dollar.
The pan-European STOXX 600 fell 0.4%.
London-listed HSBC shed 4% after Bloomberg reported
that U.S. President Donald Trump's top advisers weighed
proposals to undermine the Hong Kong currency's peg to the U.S.
dollar. The proposal could possibly limit the ability of Hong
Kong banks to buy dollars.
Finland's Nokia lost 7.5% on worries that the
company was losing the business of its key client Verizon
in the United States.
It was a rosier picture in Asia, where Chinese stocks
extended their gains to seven sessions, with the blue-chip index
up 1.6% to its highest close since June 2015. MSCI's
broadest index of Asia-Pacific shares outside Japan
was up 0.5%, still lower than a
four-and-a-half-month high reached the day before.
E-mini futures for the S&P 500 were flat.
Overnight, U.S. stocks fell, halting a five-day winning
streak by the benchmark S&P 500 index, its longest this year,
driven by better-than-expected economic data.
"It is impossible for investors not to grow weary and
eventually, at some point, fall prey to the endless drip of
negative Covid-19 stories and how the second-wave virus will
crush the market," said Stephen Innes, chief global market
strategist at AxiCorp.
"Despite the lack of market participation, it certainly
feels like we are gradually morphing from the view of a fragile
recovery to one of full-bore scepticism."
Second-quarter earnings season begins in earnest next week.
"It will be important to watch the number of U.S. deaths in
coming weeks and whether greater questions will be asked about
the extent of necessary restrictions," said NAB economist Tapas
Strickland.
California reported more than 10,000 coronavirus cases on
Tuesday, a record rise for a single day. That exceeded the
number of contact tracers recently trained by the state to
detect and prevent potential outbreaks.
Coronavirus cases were also on the rise in the Australian
state of Victoria, which led to lockdown measures being
re-imposed in Melbourne, the country's second-biggest city.
MSCI's All-Country World Index, which tracks
shares across 49 countries, was 0.2% down.
Citi analysts predicted global equities would hang around
current levels in 12 months' time.
"We expect bullish and bearish forces to cancel each-other
out," they said in a note. "We would not chase markets higher
from current levels, but would prefer to wait for the next dip."
Citi has "overweight" positions on U.S. and emerging-market
equities.
Bond markets were focused on a meeting on Wednesday between
European Union officials to discuss the shape of the EU's
recovery fund.
Yields of German 10-year government debt edged 2
basis points lower to -0.477%, just above a one-week low of
-0.495%.
Yields for Italian bonds, which have been the biggest
beneficiary of the EU recovery fund proposals, were steady.
The dollar dipped slightly as investors weighed hopes for a
quick economic recovery against anxiety about a resurgent
pandemic, blurring the overall picture.
The euro strengthened a modest 0.12% to $1.2870
while a recent fall in selling positions against the greenback
provided room for possible further drops.
Sterling traded at $1.2545, near three-week highs,
before British finance minister Rishi Sunak announced his next
moves to prevent a wave of job cuts from damaging an already
weakened economy.
In commodities, gold breached $1,800 an ounce for the first
time since 2011 as investors preferred safe-haven assets. Spot
gold was 0.4% stronger at 1,802.4 per ounce.
Brent crude futures fell 0.1%, to $43.03 a barrel.
U.S. West Texas Intermediate (WTI) crude futures slipped
0.3%, to $40.50 a barrel.
(Editing by Larry King and Peter Graff)
