GLOBAL MARKETS-Asian shares hold on to gains but virus keeps markets on edge

* Pandemic threatens sharp global slowdown
* Dollar braces for U.S. manufacturing data
* Oil market in confusion over supply glut

By Stanley White and Herbert Lash
TOKYO/NEW YORK, April 1 (Reuters) - Asian stocks clung to
gains on Wednesday, helped by a bounce in Australian shares, but
risks for equities remain large as the coronavirus pandemic
rattles the underpinnings of the global economy.
E-Mini futures for the S&P 500 ESc1 traded 1.39% lower in
Asian trade, highlighting the cautious mood.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.23%. Australian shares .AXJO jumped by
2.87%, reversing a 2% decline on Tuesday, as a slowdown in new
coronavirus cases and rising iron ore prices lifted the market.
Shares in China .CSI300 , where the coronavirus first
emerged late last year, rose 0.18%, supported by hopes the
world's second-largest economy has started to recover.
China's factory activity improved in March after plunging a
month earlier, a private survey showed on Wednesday, just
scraping into positive territory and beating analysts'
expectations. Shares in South Korea .KSII , also hit hard by the virus,
rose 0.19%, but Japanese shares .N225 fell 1.05% as a rapid
increase in coronavirus infections in Tokyo fuelled speculation
the government will place the capital on lockdown.
Wall Street tumbled on Tuesday, with the Dow registering its
biggest quarterly fall since 1987 and the S&P 500 its steepest
quarterly drop since a decade ago on growing evidence of the
massive downturn the pandemic will incur. L1N2BO2RR
U.S. economic activity is likely to be "very bad" and the
unemployment rate could rise above 10% because of efforts to
slow the spread of the coronavirus, Cleveland Federal Reserve
Bank President Loretta Mester told CNBC. L1N2BO2UT
"Investors still want to buy equities, but the coronavirus
is making everyone more cautious," said Kiyoshi Ishigane, chief
fund manager at Mitsubishi UFJ Kokusai Asset Management Co in
Tokyo.
"There are still a lot of risks out there, but if you can
identify individual shares with good dividend yields and strong
financials, then you can buy at a pretty good price."
MSCI's gauge of stocks across the globe .MIWD00000PUS was
little changed. The index fell nearly 22% for the quarter.
The number of coronavirus infections globally headed toward
800,000. Deutsche Bank analysts noted, however, that for two
consecutive days the global growth in new cases was below 10%,
having exceeded that rate for most of the past two weeks.
Health officials were much more cautious. A World Health
Organization official warned that even in the Asia-Pacific
region, the epidemic was "far from over."
The dollar bounced in Asia, rising 0.28% to 107.86 yen
JPY=EBS and gaining 0.36% to $1.2375 per British pound as
investors adjusted positions before the release of U.S.
manufacturing data.
The dollar fell broadly on Tuesday after the U.S. Federal
Reserve said it will allow foreign central banks to exchange
their holdings of U.S. Treasury securities for overnight dollar
loans to ease a dollar funding crunch. The yield on the benchmark 10-year U.S. Treasury note
US10YT=RR eased slightly to 0.6554%.
U.S. crude CLc1 held steady at $20.49 a barrel, but Brent
crude LCOc1 fell 2.09% to $25.80 per barrel as the United
States, Russia, and Saudi Arabia jostle over a massive
oversupply of oil.
Crude oil benchmarks ended a volatile quarter with their
biggest losses in history, with both U.S. and Brent futures
hammered throughout March due to the pandemic and the eruption
of a Saudi-Russia price war.
Global fuel demand has been cut sharply by travel
restrictions due to the coronavirus. Forecasters at major
merchants and banks see demand slumping by 20% to 30% in April,
and for weak consumption to linger for months.

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