REFILE-GLOBAL MARKETS-Stocks recover on signs of Trump's improving health

(Corrects grammar in headline)
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Danilo Masoni
MILAN, Oct 5 (Reuters) - Stocks and other risk assets rose
on Monday as signs that Donald Trump's health was improving
brought relief to markets after the uncertainty of his COVID-19
infection sent investors rushing for safety last week.
The U.S. President, 74, was flown to a hospital for
treatment on Friday, but his doctors said he had responded well
and could return to the White House as soon as on Monday.

The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.4% by 0812 GMT, supported by
overnight gains across Asia and a positive start in Europe.
The pan-European STOXX 600 .STOXX rose 0.7%. S&P 500
futures EScv1 rose 0.5% and Nasdaq futures NQc1 0.8%,
indicating a similarly strong start on Wall Street later.
Overhanging the relief rally, however, were concerns that
Trump's case could be more severe than public disclosures
suggest, and that more restrictive measures by governments to
slow coronavirus infections could harm the economic recovery.
Some traders were concerned by doctors' admission that Trump
had been given supplementary oxygen and steroids. "Many questions remain including the use of the steroid drug
... which is usually reserved for those with severe illness,"
said Raymond James strategist Chris Bailey in London. "Global
cases now top 35 million and various new restrictions in Paris,
New York, etc",
A survey on Monday showed the euro zone's economic recovery
faltered last month as new restrictions sent its dominant
service sector into reverse.
IHS Markit's final composite Purchasing Managers' Index fell
to 50.4, just above the 50 mark separating growth from
contraction. Trump's infection also comes less than one month before the
presidential election on Nov. 3, potentially fuelling more
market volatility and making the outcome of the vote even more
difficult to predict.
"In terms of the impact on the election, we haven't seen
enough polling to assess whether this increases or decreases his
chances of winning," said Deutsche Bank strategists.
According to a Reuters/Ipsos poll released on Sunday,
Democrat contender Joe Biden opened his widest lead in a month
in the U.S. presidential race. The volatility VIX index .VIX , known as Wall Street's fear
gauge, remained close to the one-week high it hit on Friday.
Meantime, suggestions Trump could leave hospital sent oil
prices up more than 2%. An escalating workers' strike in Norway
that has shut four of Equinor's oil and gas fields also helped
drive the gains. O/R
Brent LCOc1 prices were up 2% at $40.1 a barrel and U.S.
West Texas Intermediate CLc1 added 2.2% to $37.9 a barrel.
The dollar was little changed as investors awaited news
about U.S. Trump's health and developments in fiscal aid talks
in Washington. FRX/ The dollar index =USD was last down less
than 0.1% on the day at 93.722.
Yields on benchmark 10-year Treasuries US10YT=RR rose to
0.7088% and the yield curve US2US10=TWEB steepened slightly,
signalling investors felt comfortable taking on more risk.
But euro zone bond yields edged lower on concerns about
possible new restrictions to fight the coronavirus. GVD/EUR
The French government has announced new restrictions,
closing bars for two weeks. Other countries across Europe are
also weighing up more measures.
Gold XAU= , which is often bought during times of
uncertainty, fell 0.35% to $1,892.1, highlighting increased risk
appetite.

For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/

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