European stocks rose after Chinese shares advanced with the yuan as investors took encouragement from the Asian country's pledges to support the world's second-biggest economy in the face of the coronavirus outbreak. The yen and gold both dipped. Gains in the Stoxx Europe 600 Index were led by automakers and miners. U.S. futures climbed, though Wall Street is shut for a holiday, and Treasuries weren't trading. European bonds were steady, while the euro ticked higher, after closing on Friday at its lowest since early 2017. The dollar was flat. China's CSI 300 Index has recouped its losses since trading resumed after the Lunar New Year break, as the central bank lowered one of its interest rates and said it would support firms that can reopen as soon as possible. The momentum failed to buoy most Asian markets, however. Stocks dipped Seoul and Sydney, while Japan's Topix Index dropped after data showed the country's economy shrank the most in five years in the last quarter. Cathay Pacific Airways Ltd., which counts on China and Hong Kong for about half its revenue, gave a profit warning and blamed the virus. Investors in risk assets began the week on the front foot after China over the weekend unveiled plans to reduce corporate taxes and fees, while letting banks run up more non-performing loans. Bloomberg Economics estimated the country's economy has been running at just 40% to 50% capacity in the last week, underscoring the short-term damage done by the coronavirus-linked shutdowns of large swathes of the country. "If the Chinese economy does recover and you've added all this fiscal and monetary stimulus into it as well, the situation could be that you have much stronger emerging markets into the second half," Sunny Bangia, a fund manager at Antipodes Partners Ltd., said on Bloomberg TV. "A lot depends on how this virus gets contained and if it can morph into something more minor." Hubei, the province at the epicenter of the outbreak, Monday reported 1,933 new cases, slightly higher than a day earlier. Deaths were reported in France and Taiwan over the weekend, bringing to five the number of fatalities outside mainland China. In Singapore, the government Monday cut its growth forecasts, citing uncertainty over the length and severity of the virus outbreak. The country is expected to unveil a large stimulus package to mitigate the hit from the epidemic.
