(Adds U.S. market open, byline; changes dateline; previous
LONDON)
* Coronavirus death toll in China rises to 361
* China central bank injects $174 bln of liquidity
* Yields rise, gold slips as safe-havens lose appeal
By Herbert Lash
NEW YORK, Feb 3 (Reuters) - The dollar strengthened and a
gauge of global stocks jumped, lifted by an unexpected rebound
in U.S. manufacturing that helped temper fears that caused
stocks overnight in Asia to plunge on the potential impact of
the coronavirus in China.
Gold fell more than 1%, retreating from a four-week high, as
China's efforts to protect its economy from the virus and the
injection of 1.2 trillion yuan ($174 billion) worth of liquidity
into the markets helped stem inflows into safe-haven assets.
Bond yields rose, while the Japanese yen and Swiss franc
retreated as risk sentiment improved despite a rising infection
rate and death toll from the coronavirus outbreak.
Deaths rose to 361 as of Sunday, up 57 from the previous
day, China's National Health Commission said. All fatalities
have occurred in China, with the exception of a Chinese man who
died in the Philippines after traveling from Wuhan, the
epicenter of the outbreak. Oil prices fell, however, over concerns about energy demand
in China, though the possibility of deeper crude output cuts by
the Organization of the Petroleum Exporting Countries and its
allies offered some price support.
Shares in China plunged during the first day of trading
since China closed equity, currency and bond markets on Jan. 23
for the Lunar New Year, a break that was extended by the
government because of the coronavirus.
The benchmark Shanghai Composite index .SSEC fell 7.7%,
slicing $420 billion in value from the index, and the yuan
opened at its weakest level of 2020, sliding past 7 per dollar
CNY= . Japan's Nikkei .N225 dropped 1% to the lowest since
November and Australia's benchmark index .AXJO fell 1.3%.
But shares edged higher in Europe on relief the UK finally
exited the European Union, while U.S. stocks initially surged
more than 1% as factory activity unexpectedly rebounded in
January after contracting for five straight months amid a surge
in new orders.
"Traders are looking for value where they can," said Karl
Schamotta, chief market strategist at Cambridge Global Payments
in Toronto.
"A large part of what we're seeing in the market today is
bargain-hunting in anticipation of a return to stimulus from the
Chinese government," he said.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.30% and its emerging market index lost 0.21%.
The pan-European STOXX 600 index .STOXX rose 0.31%, while
the major Wall Street indexes gained in a broad rally.
The Dow Jones Industrial Average .DJI rose 184.83 points,
or 0.65%, to 28,440.86. The S&P 500 .SPX gained 22.72 points,
or 0.70%, to 3,248.24 and the Nasdaq Composite .IXIC added
108.56 points, or 1.19%, to 9,259.50.
The Institute for Supply Management (ISM) said its index of
U.S. factory activity increased to 50.9 last month, the highest
level since July, from an upwardly revised 47.8 in December.
A reading above 50 indicates expansion in the manufacturing
sector, which accounts for 11% of the U.S. economy.
The pound GBP= slid after British Prime Minister Boris
Johnson set out tough terms for EU talks, rekindling fears
Britain would reach the end of an 11-month transition period
without reaching a trade deal. GBP/
Sterling GBP= traded at $1.3, down 1.51% on the day and
the dollar index .DXY rose 0.42%.
The euro EUR= fell 0.33% to $1.1056, while the yen
weakened 0.17% versus the greenback at 108.59 per dollar.
Gold XAU= , which posted its best month in five in January,
slid 0.81% to $1,576.80 an ounce. Yields on U.S. debt came off
lows. US2YT=RR
Oil prices fell. Brent crude LCOc1 slid $1.26 to $55.36 a
barrel. U.S. West Texas Intermediate (WTI) crude CLc1 fell 98
cents to $50.58 a barrel.