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GLOBAL MARKETS-Stimulus hopes ease markets into explosive Q4

Thu, 1st Oct 2020 10:04

* World stocks start quarter higher

* U.S. stocks extend gains as U.S. stimulus talks progress

* Tokyo trading halted by system glitch

* Uncertainties over U.S. election cloud outlook
(updates after European open)

By Marc Jones

LONDON, Oct 1 (Reuters) - Renewed U.S. stimulus hopes lifted
global markets into what is set to be an explosive fourth
quarter on Thursday, though an all-day outage on Tokyo's Nikkei
meant it wasn't exactly a smooth start.

Europe's STOXX 600 index and the euro were
up 0.7% and 0.2% respectively before PMI economic data expected
to show the region's ongoing gradual recovery from coronavirus
slump.

The dollar was at a one-week low, as robust U.S. data
on Wednesday and hopes for U.S. fiscal stimulus led
investors to riskier currencies.

With U.S. elections, the race for a COVID-19 vaccine and a
no-deal Brexit deadline all looming, today was likely to be the
calm before the storm, said Chris Dyer, Eaton Vance's director
of global equity.

"What I have been saying is that the equity markets are
likely to move violently sideways in the next few months," he
said, though in 12 months the trajectory should be one of global
recovery.

Asian trading saw a 0.4% rise on MSCI's regional index
, led by 1.1% and 1.5% gains in Australia and
India. The day was dominated, though, by technical problems at
Tokyo Stock Exchange, the world's third-largest stock market.

TSE President Koichiro Miyahara apologised at a news
conference. He said the exchange decided to suspend the full day
of trading because an early resumption could cause market
confusion, but it planned to restart on Friday.

S&P500 futures rose 0.4%, extending Wall Street's
rebound amid strong employment data and talk of progress on
long-delayed COVID-19 relief legislation.

The pound was 0.6% weaker, after British and European
Union negotiators failed to close the gap on state aid in their
latest round of talks, one of the key elements blocking
post-Brexit trade ties.

British factory activity did grow for a fourth month in a
row and coronavirus vaccine developments underpinned market
sentiment, despite fast-rising infection rates in Europe and the
United States.

The euro rose 0.1% to $1.1756 while the Australian
dollar ticked up 0.2% to $0.7181.

In commodities, oil prices were subdued after their 10% drop
in September, with U.S. crude futures at $39.91 per barrel
and Brent futures at $42.33 a barrel.

(Reporting by Marc Jones)

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