GLOBAL MARKETS-Asian shares drop, commodities sink on virus fears after Lunar New Year break

(Adds MSCI ex-Japan and Nikkei, updates levels throughout)
* Asian stock markets : https://tmsnrt.rs/2zpUAr4
* Australian, NZ shares fall; oil slides, gold firm
* Coronavirus death toll in China rises to 361
* China c.bank injects $174 bln of liquidity on Monday
* Economists lower growth forecasts for Chinese economy

By Swati Pandey
SYDNEY, Feb 3 (Reuters) - Asian shares stumbled on Monday,
oil skidded and commodities on Chinese exchanges plunged on
their first trading day after a long break on fears the
coronavirus epidemic will hit demand in the world's
second-largest economy
Aiming to head off any panic, the Chinese government took a
range of steps to shore up an economy hit by travel curbs and
business shut-downs because of the epidemic, including cutting
its key interest rate. Despite the measures, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS fell 0.4%, on track for its
eighth straight day of losses.
Chinese shares slumped at the open with the blue-chip index
.CSI300 down about 7%.
Japan's Nikkei .N225 stumbled 0.9% while Australia's
benchmark index .AXJO skidded 1.2%, while New Zealand shares
.NZ50 dropped 1.5%.
"Until the rate of new cases peaks, equities are in limbo –
too late to sell, too early to buy," said Sean Darby, Hong
Kong-based strategist at Jefferies.
A total of 361 people have died in China from the
coronavirus with the first death out of the mainland reported on
Sunday in the Philippines. In a bid to cushion the impact on China's economy, the
country's central bank cut reverse repo rates by 10 basis points
and injected 1.2 trillion yuan ($173.8 billion) of liquidity
into the markets on Monday. Beijing also said it would help firms that produce vital
goods resume work as soon as possible, state broadcaster CCTV
reported. Still, analysts expect Chinese onshore equity markets to
remain under pressure as the number of infections is still
likely to increase in the weeks ahead.
Economists at Citigroup said the steps taken by Chinese
authorities were "unlikely to be sufficient to curtail a sharp
downturn in Q1."
"As most employees won't return to work until Feb. 9, the
output losses are likely to be larger than expected, and
incoming economic activity data will continue to prompt the
authorities to take more actions in order to reduce the adverse
impact of the Wuhan coronavirus on the economy," they noted.
Citi revised its full-year forecast for China's GDP growth
to 5.5% in 2020 from 5.8%. It also cut first-quarter growth
expectations to 4.8%, compared with 6% in the fourth quarter of
2019.
JPMorgan shaved its forecast for global growth by 0.3
percentage points for this quarter.
There was still some glimmer of hope.
"We still believe that economic activities should recover
swiftly once the number of new cases comes under control, and
subsequently market sentiment should also improve," said
JPMorgan Asset Management Asia Chief Market Strategist Tai Hui.
"This could take time to play out, but this underpins our
long-term optimism in the A-share market despite a challenging
time ahead."
E-Mini futures for the S&P500 ESc1 added 0.6%, pointing
to a positive start for Wall Street on Monday.
As Chinese markets opened after the 10-day break, Shanghai
copper SCFcv1 hit limit down as did Shanghai crude oil
ISCcv1 while yields on the country's 30-year government bonds
traded in the interbank market were down 18.5 basis points.
Dalian soymeal DSMcv1 plunged 4.1% while Dalian iron ore
DCIOcv1 hit limit down with steel prices tumbling too.

On Friday, the Dow .DJI fell 2.1%, the S&P 500 .SPX
declined 1.8% and the Nasdaq Composite .IXIC dropped 1.6% as
economists tempered their outlook for China while cconomic data
out of the United States and Europe together with a mixed batch
of corporate earnings also added to the gloom.
In currencies, the safe-haven Japanese yen JPY= held near
a 3-1/2-week high against the dollar at 108.57 after adding
about 1.5% in the last two weeks.
The risk-sensitive Australian dollar AUD=D3 , which is
often traded as a liquid proxy for the Chinese yuan, tumbled 2%
last week to hit a four-month trough of $0.6683. It was last up
0.2% at 0.6701.
The dollar index, which measures the greenback against a
basket of major currencies, was a shade higher at 97.475. .DXY
Gold, which posted its best month in five in January,
slipped 0.5% to $1,582.70, while yields on U.S. debt lingered
near five-month lows as the United States, Japan and other
countries tightened travel curbs to China. XAU=
Oil futures came off lows after skidding sharply earlier in
the session on concerns the coronavirus outbreak would hit
China's oil demand. Brent crude LCOc1 was last down 31 cents
at $56.31 a barrel after falling more than $1 at one stage. U.S.
crude CLc1 slipped 5 cents to $51.51.

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(Editing by Richard Pullin and Jacqueline Wong)