* * MSCI index dips nearly 0.3%
* * German bond yields fall to lowest in seven weeks
* * Focus returns to U.S. fiscal stimulus talks
(Updates through close of U.S. trading)
By David Randall
NEW YORK, Sept 29 (Reuters) - Global equity benchmarks slid
and government bonds inched higher Tuesday as investors remained
hesitant ahead of the first U.S. presidential debate and watched
for progress in talks for further fiscal stimulus in Washington.
With time running out to change minds or influence undecided
voters, the stakes are high as the main two White House
candidates take the stage tonight, five weeks before the Nov. 3
election.
Former Vice President Joe Biden's campaign has seized on a
fresh line of attack ahead of the debate with President Donald
Trump that is set for Tuesday night, accusing the Republican
incumbent of gaming the system to avoid paying his fair share of
taxes.
Many see a Biden victory increasing the chances of further
fiscal stimulus to counter the economic damage from the COVID-19
pandemic, judging such a scenario a boon for stocks.
"What seems clear is that were you to see a blue wave, a
Democratic sweep, you'd see substantial fiscal stimulus," said
Mike Bell, global market strategist at J.P. Morgan Asset
Management. "The risk, I have always thought, to this recovery
is premature fiscal tightening."
"Tonight's debate will be critical, since it represents one
of the last set-piece opportunities for either candidate to
change the contours of the race," Deutsche Bank analysts wrote
in a note.
MSCI's gauge of stocks across the globe shed
0.24% following broad declines in Europe and Asia. Among the
European sectors in negative territory were growth-sensitive
banks, automakers and travel & leisure.
On Wall Street, the Dow Jones Industrial Average fell
132.32 points, or 0.48%, to 27,451.74, the S&P 500 lost
16.17 points, or 0.48%, to 3,335.43 and the Nasdaq Composite
dropped 32.28 points, or 0.29%, to 11,085.25.
As the global death toll from COVID-19 rose past 1 million,
according to a Reuters tally, investors have remained focused on
prospects for a stimulus package to help the U.S. economy
recover from the damage wrought by the virus.
U.S. House of Representatives Speaker Nancy Pelosi said on
Monday that Democratic lawmakers had unveiled a new, $2.2
trillion coronavirus relief bill. Pelosi in recent days has said
she thinks a deal can be reached with the White House on a new
coronavirus relief package and that talks were continuing.
Stimulus packages were also in focus in bond markets, where
Germany's 10-year bond yield fell to its lowest in
seven weeks before first-estimate inflation readings for
September.
U.S. benchmark 10-year notes rose 5/32 in price
to yield 0.6479%, from 0.663% late on Monday.
The dollar index fell 0.27%, with the euro up
0.62% to $1.1736.
Oil prices sank as investors remained hesitant to take on
risk.
U.S. crude fell 4.01% to $38.97 per barrel and Brent
was at $40.83, down 3.77% on the day.
(Reporting by David Randall; Editing by Alistair Bell and Chizu
Nomiyama)