* Stocks helped by vaccine hopes, as US-Sino tensions simmer
* Euro at four-month high ahead of recovery fund meeting
* Oil climbs before OPEC meeting
By Marc Jones and Swati Pandey
LONDON/SYDNEY, July 15 (Reuters) - World shares climbed towards a four-month high on Wednesday with the euro and oil in tow, as hopes for a coronavirus vaccine offset rising tensions between the United States and China.
Asia had a choppy session after more barbs between Beijing and Washington over Hong Kong, but near 1% gains for London , Frankfurt, Paris and Milan early on and a rise in Wall Street futures blew away any caution.
An experimental vaccine for COVID-19 produced by the U.S. company Moderna provoked safe immune responses in all 45 healthy volunteers, an early-stage study showed on Tuesday.
Uncertainty remained over how quickly an effective and rapidly available vaccine could 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 interest rates,” he said. “What really matters, though, is consumer confidence. I think we are all going to remain fairly wary,” he said.
Hopes for progress on the European Union’s 750 billion-euro COVID recovery fund this week had the euro above $1.1430 for the first time since March. It also pushed down Italy and Spain’s bond market borrowing costs.
Overnight, Chinese shares fell 1.3% and Hong Kong was flat, after U.S. President Donald Trump ordered an end to Hong Kong’s special status under U.S. law to punish China for its “oppressive actions” against the former British colony.
That prompted a retaliatory warning from China. Japan’s Nikkei and Australia’s benchmark index remained upbeat, though, finishing up 1.6% and 1.9%, respectively. E-mini futures for the S&P 500 were up 0.8%.
China’s foreign ministry said Beijing would impose retaliatory sanctions against U.S. individuals and entities in response to a law targeting banks doing business with Chinese officials.
“Hong Kong affairs are purely China’s internal affairs and no foreign country has the right to interfere,” the ministry said.
The dollar was on the defensive, particularly against risk-sensitive currencies, following the news of progress in vaccine development.
The euro rose as high as $1.1445, its strongest since March 10 and not far off its peak so far this year of $1.1495.
The single currency has been helped by hopes the EU would agree at its summit later this week on a financing package that limited the economic damage from the pandemic.
The yen was little changed at 107.21 per dollar, off a two-week high of 106.635. The Bank of Japan kept monetary policy steady, as expected, though it warned that uncertainty over the economic outlook was “extremely high” due to various risks, including rising coronavirus infections in Tokyo.
The risk-sensitive Australian dollar pared gains to be last up 0.2% at $0.6990.
Oil prices rose after a drop in U.S. crude inventories and before a OPEC video conference on production plans later in the day. Brent crude futures were up 24 cents at $43.14 a barrel. U.S. crude futures rose 22 cents to $40.50 a barrel.
Reporting by Marc Jones, editing by Larry King