* Stocks jump in biggest single-day bounce in month
* Investors relieved as Fed pledge eases bond stress
* Factory surveys show extent of economic damage
By Herbert Lash, Sujata Rao and Marc Jones
NEW YORK/LONDON, March 24 (Reuters) - Financial markets
rebounded sharply on Tuesday, with a measure of global equities
headed for its biggest bounce since the crisis erupted a month
ago, while the safe-haven dollar recoiled as investors welcomed
unprecedented global stimulus efforts.
While the U.S. Federal Reserve's offer of unlimited
bond-buying was not expected to mitigate on its own the
devastating impact of the coronavirus, investors hoped it would
help avert a global depression with the help of other rescue
packages.
The Fed's action had failed to persuade Wall Street on
Monday, with losses of 2%-3% on major indexes. But the mood
improved on Tuesday as other governments and central banks
stepped in and Congress readied a $2 trillion stimulus package
to limit the economic fallout from the fast-spreading pandemic.
U.S. gold futures GCv1 climbed as much as 6.7% to
$1,672.60 an ounce as the moves by the Fed and others eased the
need for cash and slashed the demand for dollars.
"The Fed's measures are unprecedented, and they have been
extremely proactive in preventing this external shock from
morphing into a wider funding crisis," said Vasileios Gkionakis,
head of FX strategy at Lombard Odier.
U.S. and European stocks jumped 6% or more and the dollar
index, a basket of major trading currencies, slid.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 6.88%, the largest single-day gain since equities tumbled
from all-time highs a month ago.
The broad pan-European STOXX 600 index .STOXX rose 6.41%
and emerging market stocks rose 5.97%.
The Dow Jones Industrial Average .DJI rose 1,538.36
points, or 8.27%, to 20,130.29. The S&P 500 .SPX gained 164.01
points, or 7.33%, to 2,401.41 and the Nasdaq Composite .IXIC
added 453.25 points, or 6.61%, to 7,313.93.
The Fed also will expand its mandate to corporate and
municipal bonds and backstop a series of other measures that
analysts estimate will deliver more than $4 trillion in loans to
non-financial firms. Other countries unveiled their own measures. South Korea's
ravaged market climbed 8.6% .KS11 after the government doubled
a planned economic rescue package to 100 trillion won ($80
billion). In China, mainland stocks posted their biggest gain in three
weeks of almost 3% .CSI300 , while Japan's Nikkei .N225
soared 7%, its biggest daily gain in four years. .SS .T
But investors remained wary, as the number of coronavirus
infections topped 350,000 and new infections brought in from
abroad rose in China.
Business activity collapsed from Australia and Japan to
Western Europe at a record pace in March, as measures to contain
the coronavirus hammered the world economy, and Japan said it
was postponing the Olympics.
IHS Markit's flash composite Purchasing Managers' Index
(PMI) for the euro zone, seen as a good gauge of economic
health, plummeted to a record low of 31.4 in March, in the
biggest one-month fall since the survey began in 1998.
With no resolution to the pandemic and not enough visibility
into the depth of the economic downturn, it's too early to call
the end to the market's rout, said Joe Saluzzi, co-manager of
trading at Themis Trading in Chatham, New Jersey.
"The answer is still, 'you got to get it under control,'"
Saluzzi said about the coronavirus. "Everybody keeps saying it's
going to get worse before it gets better, so the markets are
going to remain choppy and volatile."
The government and central bank financial support helped
calm nerves in bond markets, where yields on two-year U.S.
Treasuries hit their lowest since 2013.
The benchmark 10-year U.S. Treasury note US10YT=RR fell
32/32 in price to yield 0.8674%.
Germany's 10-year yield was up 2 basis points on the day at
-0.36%, compared with a 4 bps rise before the purchasing
managers index (PMI) releases DE10YT=RR , all small moves when
compared to record lows hit at -0.90% earlier in March.
ALL ABOUT THE ECONOMY
The impact of the virus on the global economy is evident in
a series of growth forecast downgrades and advance readings of
PMIs across the world's biggest economies.
German activity plunged to the lowest since the 2009 crisis,
driven by a record services contraction, while French activity
hit all-time lows. Japan posted its biggest-ever services fall.
However, the prospect of massive Fed funding pushed the
greenback 0.26% lower against rivals, off three-year peaks
=USD , falling against the yen JPY= and sliding 1% versus the
euro EUR= .
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
China's coronavirus cases https://tmsnrt.rs/2Qq4pxe
Volatility is back on Wall Street https://tmsnrt.rs/39JliL5
Global financial markets since coronavirus escalated https://reut.rs/39dPxbR
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>