GLOBAL MARKETS-Stocks give ground, Brexit stumps sterling

* Sterling slips as UK PM describes Brexit deal as difficult
* Japan unveils $708 billion in fresh economic stimulus
measures
* Investors stay on sidelines ahead of a vote in the U.S.
Congress
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Marc Jones
LONDON, Dec 8 (Reuters) - World stocks fell on Tuesday as
investors struggled to keep the rally of recent weeks going with
COVID-19 infections still surging and London and Brussels stuck
in Brexit purgatory.
Europe's main markets saw a second day of red as the Brexit
drama and some fresh U.S.-China tensions offset news that a
90-year-old grandmother from Northern Ireland had become the
first person to get a COVID-19 vaccine outside a trial.
The pan-European STOXX 600 index .STOXX was down 0.5%
before an expected dip on Wall Street. Sterling was wobbling
GBP=D3 after falling as much as 1.6% on Monday because of the
Brexit nerves. FRX/ GBP/
A meeting in Brussels between British Prime Minister Boris
Johnston and European Commission President Ursula von der Leyen
in the coming days is now seen as possibly the only way to
salvage a trade deal. "We're always hopeful (of striking a deal) but you know
there may come a moment when we have to acknowledge that it's
time to draw stumps and that's just the way it is," Johnson said
on Tuesday, using a cricketing term for the end of play.
In contrast to the pound's buffeting, the euro fended off
the angst as a survey showed German investor sentiment was now
soaring thanks to the soon-to-be-rolled-out coronavirus
vaccines.
MSCI's broadest index of Asia-Pacific shares .MIAP00000PUS
narrowed its losses overnight as Japan announced a new $700
billion government stimulus package, but it was still down 0.1%
by the close.
Japan's Nikkei 225 .N225 had dipped 0.3%, Seoul's Kospi
.KS11 gave back 1.6% of its 20% in November. China was off
0.25% .CSI300 and Hong Kong .HSI dropped 0.6% as Sino-U.S.
tensions continued to weigh on the market.
Chinese Foreign Minister Wang Yi assured U.S. executives
that Beijing remained committed to the Phase 1 trade deal with
the United States. A report showed China's purchases of U.S.
goods and services as of October, specified in the Phase 1 deal
at $75.5 billion for 2020, was about half the level they should
be on a pro-rated annual basis. The United States also imposed financial sanctions and a
travel ban on 14 Chinese officials over their alleged role in
Beijing's disqualification last month of elected opposition
legislators in Hong Kong.
Chinese foreign ministry spokeswoman Hua Chunying hit back,
saying Beijing would take "firm counter-measures against the
malicious actions by the U.S. to safeguard our sovereignty,
security and developmental rights". DREAMS
Nasdaq futures .IXIC were pointing to a subdued start for
the record-high index and for Dow Jones Industrial Average
.DJI and S&P 500 .SPX . Tesla TSLA.O announced a $5 billion capital raise on
Tuesday, its second such move in three months, as the
electric-car maker cashes in on a rally in its shares this year.

Some investors are watching whether U.S. policymakers can
reinvigorate efforts to pass additional pandemic stimulus. The
U.S. Congress is expected to vote this week on a one-week
stopgap funding bill to give negotiators more time to strike a
compromise, as the business community cautioned inaction could
spur a deeper recession. At the same time, California, the nation's most populous
state, announced new restrictions on travel and business
activity after record case numbers and hospitalizations.
Officials in New York warned it could impose similar
restrictions soon, further weighing on the nation's recovery.
The dollar steadied against most currencies as investors
eyed potential stimulus and vaccine developments. An index that
tracks the dollar against a basket of currencies was little
changed at 90.829 =USD , not far from 90.471, its weakest since
April 2018.
The pound GBP= was down 0.3% in London at $1.3338,
although that was well above Monday's low of $1.3225. GBP/
In the bond markets, euro zone government bond yields edged
lower ahead of an expected new round of European Central Bank
stimulus later this week, and as uncertainty remained over both
Brexit and a European Union recovery fund. GVD/EUR
A two-day EU summit begins Thursday, and the bloc is ready
to set up its planned EU stimulus without Hungary and Poland,
which are maintaining their veto of the EU budget.
British borrowing costs were down, after falling 7 basis
points to 0.28% on Brexit worries on Monday. The benchmark
10-year Gilt yield GB10YT= dropped 1 basis point as did those
on German Bunds which are at -0.592%.
Oil prices fell, extending losses from the previous session.
Brent crude .LCOc1 fell 0.3% and U.S. crude .CLc1 dipped
0.5%.
Prices had come under pressure after Reuters had reported
the United States was preparing sanctions on Chinese officials
over Hong Kong. Spot gold prices XAU= were 0.22% higher at $1,867.70 per
ounce, and U.S. gold futures GCv1 settled up 0.31% at
$1,871.7, as investors bet on more stimulus money being pumped
into the financial system.
"The (global) economic system still needs significant policy
support for the reasons we know," said Joseph Little, chief
global strategist at HSBC GAM. But "my sense at the moment is
that we are in a phase of healing".

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>