* Asian stock markets: https://tmsnrt.rs/2zpUAr4
* Renewed hopes of U.S. stimulus helps push shares higher
* European and U.S. stock futures up; gold sells off
* Dollar under pressure
*
By Alun John and Tom Westbrook
SINGAPORE, Oct 6 (Reuters) - Asian stock markets advanced to
a more than two-week high on Tuesday after U.S. President Donald
Trump was discharged from hospital following treatment for
COVID-19, and as prospects for a fresh U.S. stimulus package
appeared to brighten.
European equities looked set to follow, with Euro Stoxx 50
futures STXEc1 rising 0.25%, German DAX futures FDXc1 up
0.2%, and FTSE futures FFIc1 edging up 0.06%.
Wall Street had earlier rallied on Trump's improving health,
and futures indicated that European stocks were set to follow
suit.
Gold, bonds and the dollar suffered losses amid the
improving risk appetite, while oil extended strong overnight
gains. O/R
Trump returned to the White House on Monday after a
three-night hospital stay and said he felt "real good", though
one of his doctors cautioned that he may not be out of the woods
yet. MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS rose 0.67% to a two and a half week-high, with
Hong Kong .HSI was among the leaders climbing 0.73%. Japan's
Nikkei .N225 added 0.56%.
U.S. House Speaker Nancy Pelosi and Treasury Secretary
Steven Mnuchin spoke by phone for about an hour and were
preparing to talk again Tuesday, continuing their work towards a
deal on coronavirus relief spending. As well as Trump's health, "there is also some market
attention on whether the U.S. Congress will pass the extra
stimulus bill," said Tai Hui, Chief Asia Market Strategist, J.P.
Morgan Asset Management
"If we do see some form of stimulus coming through, I think
the market will take it in a positive light as much of the
important support from the previous round has expired," he said.
S&P 500 futures ESc1 were fairly flat after the best daily
gain on the S&P 500 index .SPX in a month overnight.
China's markets remained closed for a holiday.
RISK COMEBACK
The optimism hit gold and other safe haven assets.
Spot gold XAU= fell 0.1% to $1,911 per ounce, after
hitting a two-week peak on Monday, and U.S. gold futures GCv1
were down 0.21%.
Bond markets also joined in, as a sharp selloff in U.S.
bonds on Monday carried over into Asia on Tuesday.
Benchmark 10-year Japanese government bond futures 2JGBv1
fell to a one-month low in the steepest drop in more than five
weeks and South Korean yields jumped. JP/T
However, analysts said selling in other Asian markets was
more subdued than in the U.S. market because regional investors
are beginning to price in a victory for Democratic presidential
candidate Joe Biden in the Nov. 3 election.
"The selloff in U.S. yields is more driven by Trump getting
out of hospital," said DBS rates strategist Duncan Tan in
Singapore.
"That narrows some of the uncertainties around the election
process. In the short term, at the very least, it removes the
tail risk of having to consider if Trump or Biden is unable to
participate in the election."
U.S. 10-year yields US10YT=RR were steady at 0.7718%.
In currency markets, the dollar was under pressure on other
majors apart from the yen, as higher yields can often draw flows
from Japan. FRX/
The dollar gained on the yen to reach 105.62 yen JPY= , not
far short of its highest levels in three weeks.
The typically risk friendly Australian dollar gained briefly
after the Reserve Bank of Australia left rates on hold, as
expected, but later fell back, and the potential for further
monetary easing capped gains.
Oil jumped more than 5% overnight and edged higher still in
Asia, supported by the Trump news and a supply squeeze as a
strike shut six Norwegian offshore oil and gas fields.
O/R
U.S. crude CLc1 last stood at $39.39 a barrel, up 0.43%
and, Brent crude LCOc1 rose 0.48% to $41.49.