* Stocks helped by vaccine hopes as US-Sino tensions simmer
* Euro at four-month high ahead of recovery fund meeting
* Oil climbs before OPEC meetingBy Marc JonesLONDON, July 15 (Reuters) - World shares climbed toward afour-month high on Wednesday with the euro and oil in tow, ashopes for a coronavirus vaccine offset rising tensions betweenthe United States and China.Asia had a choppy session after more barbs between Beijingand Washington over Hong Kong , but 1.7%-2.2% gainsfor London , Frankfurt , Paris and a 1%rise in Wall Street futures blew away any caution.An experimental vaccine for COVID-19 produced by U.S.company Moderna drew safe immune responses in all 45healthy volunteers, an early stage trial showed onTuesday. There were reports on Wednesday that a separateUniversity of Oxford trial was also looking good.Uncertainty remained over how quickly an effective andrapidly available vaccine can be found, said David Miller,investment director at Quilter Cheviot Investment Management,but there was a supportive backdrop for markets."This is all against the background of very low interestrates," he said. "What really matters, though, is consumerconfidence. I think we are all going to remain fairly wary."
Hopes of progress this week towards a deal on the EuropeanUnion's 750 billion-euro COVID recovery fund werealso helping Europe's mood. The euro was above $1.1430 for the first time since March and Italy and Spain's bond marketborrowing costs came down again. Overnight had been more mixed. Chinese shares fell 1.3% and Hong Kong ended flat, after U.S. PresidentDonald Trump ordered an end to Hong Kong's special status underU.S. law to punish China for its "oppressive actions" againstthe former British colony.That prompted a retaliatory warning from China's foreignministry that "Hong Kong affairs are purely China's internalaffairs and no foreign country has the right to interfere". Japan's Nikkei and Australia's benchmarkindex remained upbeat, though, finishing up 1.6% and 1.9%,respectively.
S&P 500 futures were up 1% too, with shares inModerna - which has never had a licensed product - up nearly 14%in premarket trading, and the main U.S. airlines and cruise shipoperators rose 6%-7% on the vaccine hopes. Investment bank Goldman Sachs was also pointinghigher after reporting higher quarterly profits following theCOVID crisis trading boom. JPMorgan, Citi and Wells Fargo hadreported huge Q2 profit drops on Tuesday and set aside acollective $28 billion for loan losses. RED ALERT
The dollar was on the defensive, particularly againstrisk-sensitive currencies, following the news of progress invaccine development. The euro rose as high as $1.1445, its strongestsince March 10 and not far off its peak so far this year of$1.1495. The single currency has been helped by hopes the EUwill agree at its summit later this week on a financing packageto limit the economic damage from the pandemic.The yen climbed to 106.94 from 107.21 per dollar toleave it near a two-week high. The Bank of Japan kept itsmonetary policy steady, as expected, on Wednesday though itwarned that uncertainty over the economic outlook was "extremelyhigh" due to various risks, including rising coronavirusinfections in Tokyo, which was put on "red alert" on Wednesday.Sweden's crown vaulted to its highest versus thegreenback since February 2019 and the risk-sensitive Australiandollar popped to a one-month high at $0.70 .Oil prices rose too after a drop in U.S. crude inventoriesand before a OPEC video conference on production plans later inthe day. Brent crude futures were up 24 cents at $43.14a barrel. U.S. crude futures rose 22 cents to $40.50 abarrel. OPEC and allies including Russia, collectively known asOPEC+, are set to decide whether to extend output cuts of 9.7million barrels per day (bpd) that are due to end in July orprune them back to 7.7 million bpd."Most indications suggest that it will be the latter, withmore focus on compliance and compensatory cuts," ING Economicssaid in a note.<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Global assets Global currencies vs. dollar Emerging markets MSCI All Country Wolrd Index Market Cap Bulls in the China shop ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Dmitry Zhdannikov in London, editingby Larry King/Mark Heinrich)
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