GLOBAL MARKETS-Risk assets rise on stimulus hopes and Trump's health progress

(Adds details, updates prices)
* 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 oil prices rose on
Monday as stimulus hopes and suggestions Donald Trump's health
was improving brought relief to markets after last week's rush
to safety on uncertainty over the impact of the U.S. president's
COVID-19 infection.
Trump, 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. Optimism over fiscal stimulus in the world's largest economy
also came into play after upbeat weekend comments from Trump
himself and U.S. House Speaker Nancy Pelosi, who said progress
was being made on relief legislation. The MSCI world equity index .MIWD00000PUS , which tracks
shares in 49 countries, was up 0.5% by 1214 GMT, supported by
overnight gains across Asia and the early session in Europe.
The pan-European STOXX 600 .STOXX rose 0.8%. S&P 500
futures EScv1 rose 0.7% 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.
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 were also economic questions for markets, with a survey
on Monday showing the euro zone's recovery faltered in September
as a resurgence of the coronavirus forces the reimposition of
restrictions on activity. The volatility VIX index .VIX , known as Wall Street's fear
gauge, remained close to the highs it hit on Friday.
"In the case that the markets enter a deep period of
volatility or a bear market, the odds of a fiscal stimulus will
rise dramatically," said Amundi portfolio manager Paresh
Upadhyaya. "This should help settle markets".
Meantime, suggestions Trump could leave hospital sent oil
prices up around 4%. An escalating workers' strike in Norway
that has shut four of Equinor's EQNR.OL oil and gas fields
also helped drive the gains. O/R
Brent LCOc1 prices were up 4.1% at $40.9 a barrel and U.S.
West Texas Intermediate CLc1 added 4.5% to $38.7 a barrel.
The dollar was traded in tight ranges, while riskier
currencies gained, as investors awaited news about Trump's
health and developments in the fiscal talks in Washington.
FRX/ The dollar index =USD was down 0.3% at 93.55.
Yields on benchmark 10-year Treasuries US10YT=RR rose to
0.7154% and the yield curve US2US10=TWEB steepened slightly,
signalling investors felt comfortable taking on more risk.
But euro zone bond yields held near recent lows on worries
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 initially. It later turned slightly positive,
up 0.2% to $1,902.3, as a weaker dollar offsets news on Trump's
health progress.

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