* World stocks just off record high
* Investors trying to measure spread of coronavirus
* Oil prices extend rebound from 13-month lows
* Safe-assets such as Treasuries, bonds, slip
(Updates throughout, adds new quotes)
By Sujata Rao
LONDON, Feb 12 (Reuters) - A drop in the number of new
coronavirus cases and the Federal Reserve chairman's optimistic
view of the economy lifted world stocks for a third day on
Wednesday and sparked a 2% rally in oil prices, on hopes the
epidemic's effects would be contained.
China reported its lowest number of new coronavirus cases
since late January, lending weight to a prediction from its
senior medical adviser that the outbreak might be over by April.
Those reports encouraged investors to get back into equities
at the expense of bonds, gold and the Japanese yen -- safe-haven
assets that benefited as the virus death toll mounted.
"If you look at the share indexes and other risky assets it
seems like people now believe all will be okay with the
coronavirus situation," said Francois Savary, chief investment
officer at Swiss wealth manager Prime Partners.
MSCI's global equity index rose 0.2% to stand just off
Tuesday's record highs. A pan-European equity
index rose to a record as automobile stocks -- which
depend on exports to China -- jumped 1.2%.
Futures indicated Wall Street would extend gains from
Tuesday, when the S&P 500 and Nasdaq posted record closing highs
Riskier, higher-yielding bonds also rallied. Yields on
10-year Greek governments bonds slipped under 1% for the first
Earlier, mainland Chinese shares rose almost 1%
and the offshore-traded yuan reached two-week highs.
Currencies such as the Thai baht and Korean won, reliant on
Chinese tourism and trade, gained 0.3% to 0.5%
But the yen slipped 0.3% to a three-week low
against the dollar.
Brent crude futures rose from 13-month lows, though
they are still down almost 20% from their peak in early January.
Many analysts caution against complacency over the economic
fallout. Some Chinese firms have reported job cuts caused by
damage to manufacturing supply chains.
Savary at Prime Partners agreed, noting the dollar is near
four-month highs, 10-year U.S. yields are some 30 basis points
below early-January levels and demand for Swiss francs is high.
"Investors are not completely convinced the coronavirus is
under control ... they are trying to hedge their equity bets by
taking exposure to safe-havens at the same time," he said.
Yields on U.S. Treasuries and German Bunds rose
around 2 basis points. Ten-year U.S. yields are now 12 bps off
the four-and-a-half-month lows reached in late January.
Yields rose on Tuesday after U.S. Federal Reserve Chair
Jerome Powell said the U.S. economy was "resilient." Powell also
said he was monitoring the coronavirus, because it could lead to
disruptions that affect the global economy.
The dollar rose to four-month highs against a basket of
currencies, then slipped on Wednesday.
U.S. markets also got a boost from signs President Donald
Trump might be re-elected in November, since centrist candidates
for the Democratic nomination appear to be
"Trump had a great start into the U.S. election season.
After the early end of the impeachment trial in the Senate and
the Iowa caucus chaos for the Democrats, betting markets suggest
that Trump has a 58% probability of winning re-election on 3
November," Berenberg said.
The day's big currency mover was the New Zealand dollar
, which rose 0.8% for its best daily gain since
December, after the central bank dropped a reference to further
rate cuts, suggesting its easing cycle might be over.
(Additional reporting by Stanley White in Tokyo, editing by