GLOBAL MARKETS-Asian shares up as China stocks edge higher but caution prevails

* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Financial markets trying to shake off virus woes
* Equities draw investors on hopes for more China stimulus
* Oil markets worried about demand disruptions

By Stanley White
TOKYO, Feb 5 (Reuters) - Asian stocks steadied on Wednesday
as Chinese stocks nudged higher on hopes of additional stimulus
to lessen the economic impact of a coronavirus outbreak, but
risks remain as the illness continues to spread and the death
toll neared 500.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was up 0.36%.
Shares in China .CSI300 rose 0.5% while stocks in Hong
Kong .HIS climbed 0.42% in early trading.
The onshore yuan was little changed versus the dollar,
highlighting the cautious mood as investors monitor the impact
of the virus.
The safe-haven yen and Swiss franc nursed losses versus the
dollar. Oil prices bounced in Asia on hopes for more output cuts
from OPEC and its allies but sentiment remained weak on worries
about a long-term dent in demand for energy and other
commodities.
China and other countries have imposed travel restrictions
to try to contain a new virus that emerged in the central
Chinese city of Wuhan late last year, slamming the breaks on
manufacturing and tourism in the world's second-largest economy.
Many investors argue that any slowdown will be temporary and
that Chinese policy steps are reason to remain optimistic about
the growth outlook, but so far public health officials have not
found a way to stop the spread of the virus both inside and
outside of China.
"We're going to have a strong day in Asia, but whether this
is the reversal of a downtrend remains to be seen," said Michael
McCarthy, chief market strategist at CMC Markets in Sydney.
"Oil investors remain pessimistic about demand disruptions,
but equity investors, especially overseas, are discounting the
impact of the virus."
Australian shares .AXJO were up 0.37%, buoyed by gains in
the mining sector. Japan's Nikkei stock index .N225 rose
0.99%, supported by shares of industrial equipment makers.
U.S. stock futures ESc1 fell 0.23% in Asia on Wednesday.
The S&P 500 .SPX rose 1.5% on Tuesday and the tech-heavy
Nasdaq .IXIC rose to a record high.
The People's Bank of China (PBOC) is likely to lower its key
lending rate - the loan prime rate - on Feb. 20, and cut banks'
reserve requirement ratios in the coming weeks, policy sources
told Reuters. The PBOC has already pumped hundreds of billions of dollars
into the financial system this week. This helped Chinese stocks
stabilise on Tuesday following a rout that wiped out around $700
billion in market capitalisation on Monday when Chinese markets
opened after an extended holiday.
The virus has already claimed nearly 500 lives. Japan's
health minister said on Wednesday 10 people on a cruise ship at
the port of Yokohama have tested positive for the new virus.
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In the onshore market, the yuan CNY=CFXS held steady at
6.9970 per dollar after rising 0.3% on Tuesday.
The yen JPY=EBS traded at 109.48 per dollar, close to the
lowest in almost a week. The Swiss franc CHF=EBS held steady
at 0.9696 versus the dollar following a 0.3% decline on Tuesday.
Benchmark 10-year Treasury yields US10YT=RR edged up to
1.6026% in a sign of receding concern about the coronavirus.
U.S. crude CLc1 ticked up 1.27% to $50.24 a barrel, and
Brent crude LCOc1 rose to 0.74% to $54.63 per barrel in
recovery from declines on Tuesday.
OPEC and its allies are considering cutting oil output by a
further 500,000 barrels per day (bpd) due to the impact on oil
demand from the coronavirus, sources tell Reuters. Brent futures have lost around 16% since China confirmed on
Jan. 21 that human-to-human infection of the previously unknown
virus is possible, which kicked of a rout in global markets as
the number of cases and the death toll rose.