* Stocks tumble back as tougher COVID-19 curbs gather pace
* Little sign of breakthrough in UK-EU trade talks
* Hopes for pre-election U.S. fiscal package fizzle out
By Huw Jones
LONDON, Oct 15 (Reuters) - - Global shares fell on Thursday as governments across Europe tightened restrictions to battle an accelerating second wave of COVID-19 infections, dampening the prospects for economic recovery.
Stocks in Europe fell for a third consecutive session in early trading, taking their queue from weaker markets in Asia overnight, and a Wall Street pulled lower on Tuesday by Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) as the earnings season gathered momentum.
Analysts said the rise in coronavirus infections across Europe and no sign of a vaccine anytime soon after two high profile propects experienced problems was hitting sentiment.
Hopes for a U.S. package to boost the coronavirus-hit economy before the presidential election next month have also fizzled out after U.S. Treasury Secretary Steven Mnuchin said such a deal would be difficult.
"In Europe you just have a long list of quite notable actions being taken, with Paris and other French cities going into curfew, and today reports that London is going to the next, high level phase of restrictions," said Derek Halpenny, head of research at MUFG.
"It's all pointing to a greater hit to fourth quarter activity and warrants a degree of adjustment in market pricing."
The pan-European STOXX 600 .STOXX was down 1.7% to a near two-week low, with markets in London .FTSE and Paris .FCHI lower 1.4%-1.7% and Frankfurt .GDAXI and Milan .FTMIB 2%-2.5% weaker.
"We have been trading in a range for quite some time and up until the beginning of this week, at the top end of it, and it's a trend that is likely to continue," said Michael Hewson, senior market analyst a CMC Markets.
BREXIT ON EU SUMMIT MENU
A two-day summit of European Union leaders starts on Thursday as the EU and Britain continue their efforts to overcome stumbling blocks, such as fishing rights and competition safeguards, to agreeing a trade deal before the UK's Brexit transition arrangements end on Dec. 31. Prime Minister Boris Johnson had said he would walk away from the talks if there was no deal by Oct. 15, but this threat has now eased.
"Today is unlikely to be 'doomsday' for the British pound, as talks are expected to go on between the UK and EU negotiators beyond the supposed 15 October deadline," UniCredit bank said in a note to clients. The pound barely budged whereas the euro was a touch lower against the dollar at $1.1726. GBP=D3
Investors will tune into European Central Bank President Christine Lagarde, who takes part in a debate on the global economy at 1600 GMT as part of the IMF and World Bank's annual meeting which is being held virtually.
No major euro zone economic data is expected, but in the United States markets will take stock of the latest jobless claims figures.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.6% while Japan's Nikkei .N225 dropped 0.5%.
U.S. S&P 500 futures ESc1 were pointing to a 0.6% drop while the Nasdaq equivalent sank 1.2%. On Wednesday, the S&P 500 .SPX closed down 0.7% and the Nasdaq Composite Index .IXIC shed 0.8%.
With traders seeking safety again, Germany's government bonds rallied to leave their yields at their lowest level since the March spread of COVID-19 caused the global meltdown in stock markets and other riskier assets. DE10YT=RR . GVD/EUR
Oil prices also fell as the renewed surge in the virus in large parts of the world underpinned concerns about economic activity.
Brent crude LCOc1 futures dropped 0.8% to $42.96 a barrel, U.S. West Texas Intermediate (WTI) crude CLc1 futures dropped back to $40.68 a barrel while gold XAU= and industrial metals like copper /MCU3=LX were broadly flat.