CORRECTED-GLOBAL MARKETS-Asian shares aim for second week of gains amid virus scare

(Refiles to correct company name in para 10)
* Hopes of government stimulus support shares globally
* Mainland China shares have recovered most of virus-caused
losses
* Dollar hits 4-month high as investors flee to U.S. assets
* European stock futures up 0.2-0.3%
* Graphic on coronavirus https://tmsnrt.rs/3aIRuz7

By Hideyuki Sano
TOKYO, Feb 14 (Reuters) - Asian shares inched higher on
Friday, on course to post the second straight week of gains,
helped by hopes governments will make provisions to soften the
impact on their economies from the coronavirus epidemic.
European shares are expected to rise, with pan-European Euro
Stoxx 50 futures STXEc1 up 0.21%, German DAX futures FDXc1
adding 0.3% and FTSE futures FFIc1 ticking up 0.21%.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS ticked up 0.25% on Friday for weekly gain of
1.77%.
China's blue-chip CSI300 shares .CSI300 rose 0.69%, having
recovered a whopping 95% of their losses made after the
outbreak.
The index of Chinext high-tech shares .CHINEXT rose 0.8%
to hit a two-year intraday high, led by gains in some biotech
names.
"China is already easing its monetary policy and providing
more liquidity while more stimulus is likely. Factories are
starting to reopen albeit with some delays," said Yukino Yamada,
senior strategist at Daiwa Securities.
Japan's Nikkei .N225 dropped 0.59%, not helped by the news
of first coronavirus death and signs of a potential rise in
domestic infections in the country. On Wall Street on Thursday, the S&P 500 .SPX lost 0.16%
but its futures ESc1 gained 0.23% in subsequent Asian trade to
hit record levels.
The daily death toll in Hubei, the Chinese province at the
centre of the coronavirus outbreak, halved and the number of new
cases dropped from a record posted the day before. Ryutaro Kimura, fixed income strategist at AXA Investment
Managers, expected "considerable impact" on the global economy
as China now accounts for around 17% compared to 4% during the
SARS outbreak in 2002-2003, and it is integral to more supply
chains.
"That means countries are likely to keep interest rates low
for a longer period, keeping global bond yields low. Such an
expectation in turn is supporting the world's share prices."
Market sentiment improved also after World Health
Organization official said the big jump in China's reported
cases reflects a decision by authorities there to reclassify a
backlog of suspected cases by using patients' chest images, and
is not necessarily the "tip of an iceberg" of a wider epidemic.
Still, sceptics saw it as undermining confidence in data
accuracy, a constant issue in Chinese data. While many investors hope the epidemic will gradually slow
down in coming months, allowing companies to come back to normal
operations, how long that process will take remains anybody's
guess.
"Until Wednesday, people had been saying that you can buy
shares because the number of new cases had peaked out. The
reality seems to be quite different. An early end to this seems
improbable," said Norihiro Fujito, chief investment strategist
at Mitsubishi UFJ Morgan Stanley Securities.
"Investors will surely avoid Asia for the time being and
will shift funds to the U.S., geographically the most separated
from the region," he said.
That meant more demand for the U.S. dollar in the currency
exchange market.
The dollar's index against a basket of currencies =USD hit
a four-month high, having risen 1.8% so far this month.
The euro fell to as low as $1.0827, its lowest level in
almost three years, and last stood at $1.0836 EUR= .
It also hit a nine-week low against the British pound and
4-1/2 year low against the Swiss franc.
The euro has been bruised also by rising political
uncertainties in Germany as well as worries about sluggish
growth in the region.
Annegret Kramp-Karrenbauer, who had been long expected to
succeed Chancellor Angela Merkel next year, earlier this week
gave up her bid to run for the top job, raising more concerns
about political stability in the euro zone's biggest economy.
Euro zone GDP data due later on Friday is expected show a
sluggish growth of 0.1% from the previous quarter.
Sterling jumped and so did UK bond yields as investors bet
on a higher-spending budget next month after British Prime
Minister Boris Johnson forced the resignation of Sajid Javid as
finance minister. Javid, known to have been at odds with Johnson's powerful
policy adviser Dominic Cummings over spending plans, was
replaced by Rishi Sunak, a Johnson loyalist.
The pound traded at $1.3045 GBP=D4 , after 0.65% gains on
Thursday.
The 10-year gilts yield jumped to a three-week high of
0.660% GB10YT=RR , bucking falling yields in most other major
bond markets.
The yen stayed in a familiar range in the past couple of
weeks and last traded at 109.80 yen JPY= .
Oil prices extended their week-old recovery on hopes that
the world's biggest producers would cut output more as demand
looks set to drop sharply due to the outbreak of coronavirus.
The International Energy Agency (IEA) expects oil demand in
the first quarter to fall for the first time in 10 years.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were
up 0.12% at $51.48 per barrel in early Friday trade but up 2.3%
on the week, on course to post their first weekly gains in six
weeks.

(Editing by Sam Holmes and Simon Cameron-Moore)