* Markets gain on investor hope of monetary, fiscal stimulus
* U.S. stocks up more than 1%, but Europe closes lower
* Oil prices bounce 8% after huge drop; gold prices fall 1%
By Herbert Lash and Marc Jones
NEW YORK/LONDON, March 10 (Reuters) - Oil and global equity
markets recovered on Tuesday after the prior day's shellacking
as the world's biggest economies moved to cushion the impact of
the coronavirus, but stock gains in Europe failed to hold as
investors remained skittish.
The price of Brent crude roared back as much as 10% on hopes
a supply cut deal could be rescued while most benchmark
government bond yields rose from record lows as measures took
shape to confront the epidemic's economic and human toll.
U.S. President Donald Trump said he would ask Congress for a
payroll tax cut and other "very major" stimulus moves to ease
the economic pain, but details were unclear. Japan unveiled a second package of measures worth about $4
billion in spending, focusing on support to small and mid-sized
firms. Wall Street jumped more than 3% at the open but pared gains
to about 1% in choppy trade. Investors hoped the sell-off on
Monday marked the low of a downturn that has pushed the major
U.S. indexes close to bear market territory, a decline of 20%
from recent peaks.
"Investors are trying put a bottom in here," said Rick
Meckler, partner at Cherry Lane Investments in New Vernon, New
Jersey.
"It seems like that yesterday was such a collection of so
much bad news, it shocked the market down. Today with fresh eyes
people are picking out the names they think have dropped the
most," he said.
Comments by Vice President Mike Pence that private U.S.
health insurance companies have agreed to cover coronavirus
treatment and waive co-payment fees for testing helped U.S.
stocks rebound after briefly turning lower.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.80% but the pan-European STOXX 600 index .STOXX lost
1.14%, solidly in bear territory.
Major European bourses declined after initial gains and
remained in bear territory. The FTSE 100 .FTSE in London
almost eked out a gain but closed down 0.1% as oil companies
rebounded following a crash in oil prices as Saudi Arabia and
Russia engaged in a price war.
Oil heavyweights BP Plc BP.L and Royal Dutch Shell Plc
RDSa.L gained 3.4% and 3.7%, respectively, after closing
Monday with their worst session on record. O/R
"Traders are a bit nervy, the only positive news we've been
getting out is probably rate cuts or tax cuts," Michael Baker,
an analyst at ETX Capital in London.
"We need news in terms of the actual control of the virus,
which we don't seem to be having right now," he said.
Yields on benchmark U.S. 10-year Treasury debt more than
doubled to 0.70% and those on German Bunds jumped around 20
basis points at one point as investors pared some safe-haven
holdings, though they were beginning to ease again. GVD/EUR
Many strategists and economists expect the Federal Reserve
to cut U.S. interest rates to zero as part of a global move to
provide strength and liquidity to the financial system.
The dollar rallied after huge losses against the safe-haven
Japanese yen and Swiss franc, but analysts said it was too early
to predict a floor. The greenback plunged on Monday after the
Saudi-Russia price war triggered the biggest daily rout in oil
prices since the 1991 Gulf War.
Stocks in Asia rebounded, with Japan's Nikkei .N225
closing up 0.85% after earlier touching its lowest level since
April 2017. .T
China's benchmark Shanghai Composite Index .SSEC traded
2.1% higher as new domestic coronavirus cases tumbled and
President Xi Jinping's visit to the epicenter of the epidemic
lifted sentiment.
The oil rally had the most horsepower. About half of its
massive losses from Monday were clawed back, offering hope that
markets had found a floor despite still-fragile sentiment.
Russian oil minister Alexander Novak said he did not rule
out joint measures with the Organization of the Petroleum
Exporting Countries to stabilize the market.
Benchmark Brent crude futures LCOc1 bounced by $2.83 to
$37.19 a barrel, roughly half the level it started the year.
Gold prices fell 1%, retreating from the last session's jump
above the key $1,700 level, as safe-haven demand waned a little
amid speculation about global stimulus measures. GOL/
Analysts assumed policymakers would have to respond
aggressively to prevent an economic crisis. The Fed on Monday
sharply stepped up the size of its fund injections into markets
to head off stress.
Having delivered an emergency rate cut only last week,
investors are fully pricing an easing of at least 75 basis
points at the next Fed meeting on March 18, while a cut to near
zero was now seen as likely by April. 0#FF:
Britain's finance minister is due to deliver his annual
budget on Wednesday and there is talk of coordinated stimulus
with the Bank of England. The European Central Bank meets on Thursday and will be
under intense pressure to act, even though euro zone rates are
already deeply negative. The bond market had charged ahead of the central banks to
essentially price in a global recession of unknown length.
Yields on 10-year U.S. Treasuries US10YT=RR dipped to as
little as 0.318% on Monday - a level unthinkable just a week ago
- but rose back to 0.6787% on Tuesday amid the stimulus chatter.
Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Plunging oil, coronavirus stoke credit concerns https://tmsnrt.rs/2TBKldj
The U.S. dollar and 10-Year U.S real yields https://tmsnrt.rs/32WoiRq
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