* Stocks arrest slide as authorities tackle spread of virus
* Sterling rises sharply against the dollar
* Oil tumbles as Libya supply jitters dissipate
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(Updates death toll from virus; updates prices, market activity
and comments)
By Rodrigo Campos
NEW YORK, Jan 22 (Reuters) - World stock markets bounced
back on Wednesday, even as deaths from China's new virus rose to
17, while oil prices tumbled as a market surplus forecast
alleviated supply concerns.
Worries about contagion of the virus and its effect on the
global economy, particularly as millions travel for upcoming
Lunar New Year festivities, had knocked the world's top equity
markets off record peaks.
Official newspaper China Daily on Wednesday said 544 cases
had now been confirmed in the country. Cases of the previously
unknown, flu-like coronavirus have emerged as far away as the
United States. The outbreak revived memories of the Severe Acute
Respiratory Syndrome (SARS) epidemic in 2002-03, a virus
outbreak that killed nearly 800 people worldwide and hit Hong
Kong's economy particularly hard.
Though Hong Kong confirmed its first case are now in place to minimize public gatherings in the
most affected regions.
"The call here is not that the virus is done or nipped in
the bud by any means," said Kay Van-Petersen, global macro
strategist at Saxo Capital Markets. "But there have been no big
further reported outbreaks, and the response from the Chinese
authorities has been very, very positive". Germany's DAX .GDAXI touched an intraday record high but
ended the day down 0.3%. Italy's benchmark fell after reports
the leader of its co-governing 5-Star movement had resigned.
Italian government bonds saw their biggest sell-off in a
month. Yields, a proxy of the country's borrowing costs, jumped
as investors wondered whether the country's fragile coalition
would collapse. GVD/EUR
Across the Atlantic, the S&P 500 hit a record high boosted
by waning fears over the coronavirus. An airline stock index
.XAL rose 1.0% after falling as much as 3.8% on Tuesday.
IBM IBM rallied 3.1% after better-than-expected full-year
profits, while streaming giant Netflix NFLX.O warned the next
few months would be tougher and its stock fell 3.1%. .N
The Dow Jones Industrial Average .DJI rose 31.05 points,
or 0.11%, to 29,227.09, the S&P 500 .SPX gained 8.7 points, or
0.26%, to 3,329.49 and the Nasdaq Composite .IXIC added 49.30
points, or 0.53%, to 9,420.11.
The pan-European STOXX 600 index .STOXX lost 0.08% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.25%. Emerging market stocks .MSCIEF rose 0.63%.
Overnight, the coronavirus developments boosted Shanghai
stocks .SSEC from an early 1.4% drop to end higher. Japan's
Nikkei .N225 , South Korea's Kospi index .KS11 and Hong
Kong's Hang Seng .HSI all rose by more than half a percentage
point.
NO PANIC, CAUTION
Companies across China are handing out masks and warning
staff to avoid the central city of Wuhan amid fears that the
virus will rapidly spread as much of the population embarks on
travel for Lunar New Year holidays. The dollar index .DXY rose 0.05%, with the euro EUR= up
0.03% to $1.1085.
The Japanese yen strengthened 0.01% versus the greenback at
109.88 per dollar, while Sterling GBP= was last trading at
$1.3124, up 0.59% on the day.
Oil prices fell sharply as traders figured a well-supplied
global market would be able to absorb disruptions that have cut
Libya's crude production. O/R
U.S. crude CLc1 fell 2.52% to $56.91 per barrel and Brent
LCOc1 was last at $63.33, down 1.95% on the day.
U.S. 2-year, 10-year and 30-year yields were little changed
but earlier hit fresh two-week lows after the Bank of Canada
held interest rates steady and opened the door for possible
easing amid an economic slowdown, rekindling worries about
global growth. US/
"Going into this year, the belief was that global easing was
over and things were looking better for the entire world," said
Jim Vogel, senior rates strategist at FHN Financial in Memphis.
"For Canada to sort of change its outlook fairly quickly
opens up the possibility that easing could occur elsewhere too,"
he added.
Benchmark 10-year notes US10YT=RR last rose 1/32 in price
to yield 1.7673%, from 1.769% late on Tuesday.
Spot gold XAU= fell 0.07% to $1,557.84 an ounce. U.S. gold
futures GCc1 gained 0.01% to $1,556.50 an ounce. Copper
CMCU3 lost 0.92% to $6,103.50 a tonne.
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