(Adds details, updates prices)
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Danilo Masoni
MILAN, Sept 23 (Reuters) - Shares rose and the dollar
steadied at new highs on Wednesday, with overnight gains by Wall
Street tech champions helping balance concerns that new
restrictions to counter coronavirus infections will hurt the
Renewed hopes of stimulus measures in Europe also came into
play after surveys of private sector economic activity in
September painted a gloomy picture for the region, with rising
COVID-19 infections leading to a downturn in services.
MSCI's world equity index, which tracks
shares in 49 countries, was 0.3% higher, while the pan-European
STOXX 600 benchmark progressively extended opening
gains to rise 1.3%.
Technology shares were among the strongest gainers from the
start in Europe following a rally overnight in U.S. heavyweights
Amazon, Microsoft, and Apple, and a
positive performance earlier of peers in Asia. Tech companies
have been rare beneficiaries of lockdown measures, with more
people working and shopping from home.
A rebound in beaten-down sectors provided extra support.
Nasdaq futures meanwhile built on Tuesday's strong
bounce to gain 0.2%. S&P 500 futures were 0.4% higher.
Carlo Franchini, head of institutional sales at Banca
Ifigest in Milan, said that despite the gains the underlying
mood remained highly cautions given uncertainty linked to the
pandemic and its effect on the recovery.
"The U.S. is the only market that's riding on. Investors are
interested only in big U.S. tech, even though they should look
elsewhere if they took fundamentals into account," he said.
"Cornonavirus is a Damocles' sword for markets. If we
continue with uncertainty over a possible vaccine, it's going to
be a problem."
UBS Asset Management said on Wednesday that an emergency
approval of one to three COVID-19 vaccines was likely in the
coming months, a milestone that could finally end the surge of
mega-cap U.S. tech stocks.
Purchasing managers' (PMI) surveys showed euro zone activity
growth ground to a halt this month, throwing the recovery into
question, as fresh restrictions to quell a resurgence in
coronavirus infections sent the services industry into reverse.
"It seems a W-shaped economic projection might be developing
following the brief bounce in PMI numbers over the summer," said
Charles Hepworth, Investment Director at GAM Investments.
"What this means is that continued stimulus across the euro
zone will be hopefully forthcoming -- or at least that's what
markets are placing their bets on," he added.
In Britain, the recovery from the coronavirus lockdown lost
some momentum this month, according to a PMI survey taken before
Prime Minister Boris Johnson announced a new round of
restrictions that could probably last six months.
Earlier, MSCI's broadest index of Asia-Pacific shares
outside Japan rose 0.3% for its first gain this
week, but the mood was hardly bullish. Japan's Nikkei
returned from a two-day holiday to slip 0.1%.
In foreign exchange markets, the standout mover was the
dollar, which surged to its highest level since July 27 against
a basket of six major currencies before paring those
gains to trade flat.
"Risk-aversion on the back of new COVID-19 infections
affecting Europe more directly remains an important factor this
week," UniCredit strategists said in a note.
"This means that the USD is likely to remain firm in its
role as preferred safe-haven currency," they added.
The euro was flat after rebounding from a two-month
low hit on concerns about coronavirus infections and after the
tepid European surveys.
Commodities were weighed down by the robust dollar and
worries linked to the economic impact of a second wave of
Gold touched a six-week low as the dollar strengthened. Spot
gold was last down 0.3% to $1,893.8 per ounce.
Oil managed to reverse course and turn positive, helped by
a report saying U.S. fuel inventories fell.
Brent crude futures were last up 0.5% at $41.91 a
barrel and U.S. crude futures slipped 0.3% to $39.92.
Italy's 30-year bond yield fell to a record low
of 1.76% as the country's debt remained supported after local
elections reduced the risk of a snap national poll.
U.S. bonds fell, with the yield on benchmark 10-year U.S.
debt up 1.3 basis point at 0.6773%.
For Reuters Live Markets blog on European and UK stock
markets, please click on:
(Additiona reporting by Tom Westbrook in SINGAPORE
Editing by Tomasz Janowski and Catherine Evans)