* European shares touch record high
* MSCI world index up 0.5%
* China will cut some U.S. import tariffs by half
* Record Wall Street highs lift mood
* Safe-havens sold off
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(Releads, adds European markets, economist comment)
By Tom Wilson and Hideyuki Sano
LONDON/TOKYO, Feb 6 (Reuters) - Stock markets across the
world gained on Thursday, helped by record highs on Wall Street
and a move by China to halve tariffs on some U.S. goods as
investors bet that the global economy would avoid long-term
damage from the coronavirus.
Momentum from Wall Street spilled from Asia into European
markets, gathering pace as investors assessed prospects for help
to the global economy in the form of government stimulus and
looser policy from central banks.
Europe's STOXX 600 .STOXX index gained 0.4% to a record
high, with a swathe of strong earnings reports helping. Indexes
in Frankfurt .GDAXI , Paris .FCHI and London .FTSE all made
solid gains, rising between 0.3% and 0.7%.
Italy's biggest bank UniCredit CRDI.MI rose 5% after it
posted a lower-than-expected fourth-quarter net loss.
China said on Thursday it would halve tariffs on some U.S.
goods, which could help improve negotiating conditions for a
second phase of a trade accord after the two countries signed
off on an interim deal last month. The move, which came after China's central bank eased policy
last weekend, helped MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS jumped 1.6%. Bluechip
Chinese shares gained 1.9% .CSI300 .
U.S. stock futures ESc1 rose 0.5%, while the MSCI world
equity index .MIWD00000PUS , which tracks shares in 49
countries, gained 0.5%.
Markets were already beginning to emerge from safe-haven
assets and bet on the virus being a short-term shock, even while
the human toll continues to grow.
"The market is looking through the near-term disruption to
activity and seeing potential for quite a sharp rebound later
this year on the back of even looser policy," said Tim Drayson,
head of economics at Legal & General Investment Management.
Evidence of appetite for riskier bets was apparent in
currencies, where China's onshore yuan CNY=CFXS climbed 0.2%
to its strongest level since Jan. 23 after the tariff cuts were
announced. The Australian dollar AUD=D3 also gained.
The Japanese yen, considered a safe haven, slipped to a
two-week low against the dollar JPY= .
Bond yields also rose. The 10-year U.S. Treasuries yield
climbed to 1.672% US10YT=RR from a five-month low touched on
Friday. Euro zone bond yields told a similar story, with German
bund yields DE10YT=RR climbing to their highest in almost two
weeks. SLUMP"?
Another 73 people on the Chinese mainland died on Wednesday
from the virus, the highest daily increase so far, bringing the
total death toll to 563, the country's health authority said on
Thursday. Statistics from China indicate that about 2% of people
infected with the new virus have died, suggesting it may be
deadlier than seasonal flu but less deadly than SARS, another
reason that investors remain relatively calm. Traders also cited vague rumours of a possible vaccine for
the coronavirus as a trigger for Wednesday's stock rally, even
though the World Health Organization has played down media
reports of "breakthrough" drugs. "The coronavirus is continuing to spread so we need to
remain cautious. But markets now appear to think that there will
be a quick economic recovery after a short-term slump," said
Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset
Management.
On Wall Street, the S&P 500 .SPX and Nasdaq .IXIC had
both reached record highs after jobs and service sector
indicators suggested the economy could continue to grow this
year even as consumer spending slows. Elsewhere, major currencies were largely quiet. The euro
stood flat at $1.0996 EUR= , while the dollar against a basket
of six major currencies .DXY slipped a fraction to 98.262.
Oil futures rose for a second day amid investor optimism
over unconfirmed reports of possible advances in combating the
coronavirus outbreak in China, which could cause fuel demand to
rebound in the world's biggest oil importer.
Brent LCOC1 rose by 66 cents, or 1.2%, to $55.97 a barrel
by 0842 GMT, having risen 2.4% in the last session.
Still, it is down about 15% so far this year.
Copper, considered a good gauge on the health of the global
economy because of its wide industrial use, showed some signs of
stabilisation although it remained depressed overall.
Shanghai copper SCFc1 extended its rebound into the third
day, rising 1.4% from 33-month low hit earlier this week.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/
Daily cumulative cases of coronavirus JPG https://tmsnrt.rs/2Rgj92F
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