GLOBAL MARKETS-Stocks rally, safe-haven currencies drop, on China plan to cut tariffs

(Adds U.S. market open, byline, dateline; previous LONDON)
* Dow industrials, S&P 500, STOXX, TSX hit record highs
* China to cut some U.S. import tariffs buoys sentiment
* Gold rises on virus-related global growth concerns

By Herbert Lash
NEW YORK, Feb 6 (Reuters) - World equity markets rallied for
a fourth day on Thursday, with a bevy of key stock indexes
touching fresh peaks, as news that China will soon cut tariffs
on some U.S. goods buoyed risk sentiment and pushed safe-haven
currencies lower.
The yield on Germany's benchmark 10-year Bund touched its
highest in almost two weeks and U.S. Treasury yields ticked
higher as investors bet China's efforts to contain a
fast-spreading coronavirus would mitigate the impact of the
outbreak on the global economy.
U.S. Treasury Secretary Steven Mnuchin, in an interview with
Fox Business Network, downplayed concerns that the outbreak
could affect global supply chains, but acknowledged "this is
something we're monitoring very carefully." Major stock indexes, including the STOXX Europe 600 .STOXX
of small-, mid- and large-cap stocks, the benchmark U.S. S&P 500
.SPX and Dow industrials .DJI on Wall Street, and the
S&P/TSX composite .GSPTSE in Toronto, set fresh records.
The yen slid to a two-week low against the dollar and the
franc fell to its weakest in more than a week as investors
hailed news China would halve tariffs https://www.reuters.com/article/us-usa-trade-china-tariffs/china-to-halve-tariffs-on-some-u-s-imports-as-virus-risks-grow-idUSKBN2000C0
on 1,717 U.S. goods it imposed after the signing of a Phase 1
trade deal. Many risk-off moves taken over the past two weeks are being
unwound, said Simon Harvey, an FX market analyst at Monex Europe
in London.
"We're seeing credible responses from monetary authorities
in China and it looks like it's soothing market fears of a more
entrenched slowdown in the Chinese economy," Harvey said.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.55% and its emerging market stocks rose 1.22%.
The pan-European STOXX 600 index .STOXX rose 0.43%, helped
by a swathe of strong earnings reports. Indexes in Frankfurt
.GDAXI , Paris .FCHI and London .FTSE all gained, rising
between 0.4% and 0.9%.
The Dow Jones Industrial Average .DJI rose 58.64 points,
or 0.2 percent, to 29,349.49, the S&P 500 .SPX gained 9.54
points, or 0.29 percent, to 3,344.23 and the Nasdaq Composite
.IXIC added 50.24 points, or 0.53 percent, to 9,558.92.
Rebounding worker productivity in the fourth quarter and
other U.S. economic data also lifted sentiment on Wall Street.
The number of Americans filing for unemployment benefits
dropped to a nine-month low last week, indicating a tight labor
market would keep the longest U.S" economic expansion in history
on track despite weak business investment. The dollar index .DXY rose 0.2%, with the euro EUR= down
0.21% to $1.0974. The yen JPY= weakened 0.13% versus the
greenback at 109.98 per dollar.
Gold rose on expectations central banks will keep interest
rates low. Spot gold XAU= added 0.5% to $1,563.71 an ounce.
Remarks by European Central Bank President Christine Lagarde
that euro zone growth remains modest but there are signs of
stabilization put upward pressure on bond yields in Europe.
Germany's Bund yield rose as much as 3 basis points to
-0.339%, its highest in almost two weeks DE10YT=RR , before
pulling back to around -0.39%.
Benchmark 10-year U.S. Treasury notes US10YT=RR fell 2/32
in price to yield 1.6543%.
Brent gave up early gains that were boosted by potential
action from the Organization of the Petroleum Exporting
Countries and allies led by Russia to counter faltering demand
in China after the coronavirus outbreak.
Brent LCOC1 fell by 33 cents to $54.95 a barrel while West
Texas Intermediate rose 28 cents to $51.03 a barrel.

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