* Asian equity markets : https://tmsnrt.rs/2zpUAr4
* European stock futures point to positive start
* Coronavirus spreads, death toll rises to 427
* Commodity slide continues amid worries about China demand
By Wayne Cole and Tomo Uetake
SYDNEY/TOKYO, Feb 4 (Reuters) - Asian stocks bounced on
Tuesday with Chinese markets reversing some of their previous
plunge amid official efforts to calm virus fears, although
investor sentiment remained fragile with oil near 13-month lows.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 1.5%, led by gains in South Korea .KS11
and Australia .AXJO . Japan's Nikkei .N225 edged 0.6% higher.
China's markets steadied in choppy trade after anxiety over
the spreading coronavirus erased some $400 billion in market
value from Shanghai's benchmark index on Monday as markets
resumed from the Lunar New Year holiday.
The Shanghai Composite .SSEC gained 1.2%, while the
blue-chip CSI300 .CSI300 rebounded 2.5%, one day after a
nearly 8% slide on Monday. Hong Kong's Hang Seng .HSI advanced
1.0%.
Despite the relative market calm on Tuesday, the outbreak
continued to generate concerning headlines with Hong Kong
reporting its first coronavirus death, the second fatality
outside mainland China with the total death toll now 427.
"Chinese authorities have been providing a lot of support
for the financial markets. There's a level of assurance that the
rout would not be allowed to go on much further than necessary,"
Christy Tan, head of markets strategy for Asia at National
Australia Bank in Singapore.
"This could prove to be temporary if we see worse news or
little sign of reaching containment of the (coronavirus)
situation," she added.
In an effort to stop the plunge, China's state-backed
Securities Times published an op-ed on Tuesday to call on
investors not to panic. That followed moves by China's securities regulator on
Monday to limit short selling and stop mutual fund managers
selling shares unless they face investor redemptions, according
to Reuters. China's central bank has flooded the economy with cash while
trimming some key lending rates, but analysts suspect more will
have to be done to offset the economic fallout from the virus.
"Given the extent of the shutdowns in China as well as the
rapid rise in the virus that is likely to continue through March
or April, a significant hit to China and regional growth is very
likely," said JPMorgan economist Joseph Lupton.
"We would assume that in addition to bridging any funding
stresses, fiscal policies will need to be ramped up to support
growth once the contagion gets under control."
European markets were expected to follow suit, with major
stock futures STXEc1 FDXc1 FFIc1 trading up around 0.4-0.5%.
Elsewhere, E-Mini futures for the S&P 500 ESc1 gained
0.6%, extending a 0.7% bounce overnight, even after
disappointing earnings results from Alphabet Inc GOOGL.O .
Wall Street had taken comfort from a surprisingly solid
reading of U.S. manufacturing with the Dow .DJI ending Monday
with a rise of 0.5%, while the S&P 500 .SPX gained 0.7% and
the Nasdaq .IXIC 1.3%. .N
"This is just a typical reversal after a big fall. Vague
concerns about Wuhan virus are still weighing on U.S. stocks,"
said Masanari Takada, cross asset strategist at Nomura
Securities in Tokyo.
U.S. factory activity rebounded in January after contracting
for five straight months amid a surge in new orders, offering
hope that a prolonged slump in business investment has probably
bottomed out. The upbeat report nudged Treasury yields up from deep lows
and gave the U.S. dollar a modest lift.
The dollar firmed to 108.83 yen JPY= from an overnight low
of 108.30, while the euro faded a fraction to $1.1059 EUR= but
remained well within recent snug ranges.
Against a basket of currencies, the dollar bounced back to
97.826 =USD from a trough of 97.406.
The offshore yuan gained 0.3% to 6.9935 yuan per dollar
CNH= , in line with rebounds in Chinese shares and holding
above its one-month low of 7.0230 per dollar hit in European
trade on Monday.
The Aussie dollar rose 0.4% to $0.6718 AUD=D4 , pulling
away from the 10-1/2-year low of $0.6670 touched in October,
after the Reserve Bank of Australia kept its main cash rate at a
record low of 0.75%. In the commodity markets, oil futures staged a modest
rebound, one day after slumping to the lowest in more than a
year on worries about the impact of the coronavirus on demand
for fuel.
Brent crude LCOc1 added 0.8% to $54.90 a barrel, while
U.S. crude CLc1 gained 1.1% to $50.67.
A swath of commodities from copper to iron ore joined oil in
the dumpster amid fears the drag on Chinese industry and travel
would sharply curb demand for fuel and resources.
The Dalian Commodity Exchange's most-traded iron ore futures
contract DCIOcv1 , expiring in May, slumped as much as 6.1% to
569.50 yuan ($81.12) a tonne, its lowest since Nov. 12.
Spot gold was off at $1,572.41 per ounce XAU= , from a top
of $1.591.46, as the dollar firmed and safe haven demand waned a
little. GOL/
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Oil, copper, Chinese stocks performance since virus outbreak
https://tmsnrt.rs/37RShMa
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