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Australia shares slip as U.S. and Europe COVID-19 cases jump

* U.S. & European COVID-19 outlook not great - analyst

* Energy stocks help limit losses

* Australia’s Victoria state with zero COVID-19 case in 24 hours (Updates to close)

Oct 26 (Reuters) - Australian shares dipped on Monday, with gold stocks leading losses, as a record rise in coronavirus cases in the United States and parts of Europe made investors nervous about a global economic recovery.

The S&P/ASX 200 index slipped 0.2% to close at 6,159.20. The benchmark fell 0.1% on Friday.

The United States saw its highest ever number of new COVID-19 cases on Friday and Saturday, with a Reuters tally showing hospitalizations are also rising and have hit a two-month high and deaths are trending upwards.

France registered a record rise in coronavirus infections on Sunday as a second wave of cases surges through Europe.

“The outlook is not great in terms of U.S. & European COVID-19 cases... it could lead to more restrictions that could restrict economic activity and hamper the recovery,” said James Tao, market analyst at CommSec.

Sentiment was also weighed by uncertainty over the timeline of the U.S. coronavirus relief package, which swung global indexes all through last week, with House Speaker Nancy Pelosi and President Donald Trump stuck in a deadlock over negotiations.

“It looks like it’s (U.S. stimulus) going to be a prolonged process that could be uncertain for a number of weeks. I think markets are beginning to worry about it,” said Mathan Somasundaram, Chief Executive of Deep Data Analytics.

Limiting losses in markets, Australia’s second-most populous state, Victoria said on Monday it had gone 24 hours without detecting any new COVID-19 cases, raising hopes that a stringent lockdown of Melbourne will be eased.

Gold stocks finished 1.1% lower, as bullion prices fell due to a stronger dollar. Chalice Gold Mines and West African Resources each lost about 5%.

A gainer was the energy index, which finished 0.2% higher, with Santos climbing 0.4% and Oil Search gaining 0.7%.

New Zealand’s benchmark S&P/NZX 50 index finished up 0.5% at 12,470.34.

Reporting by Nikhil Subba in Bengaluru; Editing by Amy Caren Daniel

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