GLOBAL MARKETS-Dollar rallies, equities flat, as European COVID-19 cases rise

(Updates through afternoon U.S. trading.)

NEW YORK, March 25 (Reuters) - The dollar hovered near four-month highs and global equity benchmarks were little changed Thursday as investors weighed rising coronavirus cases in Europe with improved unemployment numbers in the United States that suggested the world’s largest economy was rebounding from the pandemic.

Oil prices sank after surging on Wednesday when a container ship became stuck in the Suez Canal. The ship may block the vital shipping lane for weeks.

European markets edged lower following the biggest rise in new coronavirus cases in Germany since Jan. 9 and the largest number of patients with COVID-19 requiring intensive care in France so far this year.

The dollar index hit its highest since November overnight, at 92.697, breaking its 200-day moving average.

The dollar index rose 0.201%, with the euro down 0.27% to $1.178.

“The dollar is absolutely critical,” said James Athey, investment director at Aberdeen Standard Investments. “If the dollar starts rallying, that becomes a problem. It means commodity weakness and emerging-market weakness and it starts to provide a disinflationary countervailing narrative.”

MSCI’s gauge of stocks across the globe shed 0.05%, hovering near its lowest level in more than two weeks.

Weighing on sentiment was a selloff in Chinese technology shares amid concern they will be delisted from U.S. exchanges on worries about a semiconductor shortage.

In Hong Kong, companies with U.S. listings led declines. lost 3.57% and Alibaba fell 3.91%.

China’s blue-chip CSI300 index edged 0.05% lower to its lowest close since Dec. 11, weighed by jitters about policy tightening and rising tensions between China and Western countries over allegations of human rights abuses in Xinjiang.

In afternoon trading on Wall Street, the Dow Jones Industrial Average rose 103.07 points, or 0.32%, to 32,523.13, the S&P 500 gained 8.46 points, or 0.22%, to 3,897.6 and the Nasdaq Composite dropped 29.52 points, or 0.23%, to 12,932.37.

Benchmark 10-year notes last fell 2/32 in price to yield 1.6191%, from 1.614% late on Wednesday.

Investors have focused on the 10-year Treasury yield, pondering whether there is room for long-term interest rates to run, said David Kelly, chief global strategist at JPMorgan Asset Management.

“We know that the economy is primed to begin to really accelerate in the second quarter,” Kelly said. “But we haven’t seen that acceleration yet, so that’s what we’re waiting for.”

The number of Americans filing new jobless claims fell to a one-year low last week, a sign the U.S. economy is on the verge of stronger growth as its vaccine rollout accelerates.

“We’re getting a little softness in the markets on virus-variant jitters, but we’re buyers on weakness as the economy gets closer to a full-scale reopening,” said Cliff Hodge, chief investment officer for Cornerstone Wealth.

U.S. crude fell 4.3% to $58.55 per barrel and Brent was at $61.87, down 3.94% on the day.

Spot gold dropped 0.3% to $1,729.19 an ounce, while bitcoin slid 3%.

Reporting by David Randall; Editing by Bernadette Baum, Sonya Hepinstall and Angus MacSwan