Asian markets rallied again Thursday despite the China virus claiming hundreds of lives and infecting tens of thousands, with investors welcoming strong US jobs data and Beijing's decision to slash levies on US imports.
Equities gained across the board on building optimism that the outbreak, which has spread to more than 20 countries, can be contained and the economic impact limited.
After last week's big losses, and a near eight-percent drop in Shanghai on Monday, observers said traders have been coming back on relatively low valuations, with reasonably healthy earnings reports also providing much-needed support.
Analysts generally have expressed confidence the illness will be largely contained to China and the economic harm will not be lasting.
Huge cash injections by the Chinese central bank into the country's financial markets have also soothed investor concerns.
"The markets are not only holding up, but they're going up," said AxiCorp analyst Stephen Innes. "And to suggest risk appetite continues to 'creep' back in favour might be the biggest understatement of the week as equity markets just burst higher."
He added that while the World Health Organization has played down reports that a cure might soon be developed, "any progress on treatment may also be a comfort to investors that the longer-term secondary effects of the outbreak are contained".
In afternoon trade, Hong Kong -- which lost almost six per cent last week -- surged 2.6 per cent, having risen about as much over the two days previously. Shanghai ended 1.7 per cent higher and Tokyo climbed 2.4 per cent.
Seoul rallied 2.8 per cent, Sydney climbed 1.1 per cent and Taipei piled on 1.5 per cent, with Mumbai, Manila, Bangkok and Jakarta also well up.
Markets cheered China's announcement that it would halve levies on USD 75 billion worth of US imports after the two last month signed their mini trade deal that dialled down a long-running and painful trade war.
The move is aimed at "promoting the healthy and stable development of China-US economic and trade relations", the State Council Tariff Commission said in a statement.
Until last week's virus-linked sell-off, markets had been enjoying a bright start to the year because of the agreement, which paused the tense standoff between the world's top two economies that had damaged global growth.
Investors were already on a roll with another surge on Wall Street where the S&P 500 and Nasdaq chalked up new records after figures showed private firms added a forecast-smashing 291,000 new jobs last month, marking the biggest gain since December 2014.
The news bodes well for closely watched non-farm payrolls data on Friday that will provide a clearer snapshot of the world's top economy.
Another report showed activity in the crucial US services sector accelerated for the second straight month.
"What a difference a couple of days makes. Last week, the news on the coronavirus was very much in the developing stage and markets could not see through the fog of negative implications," said National Australia Bank's Gavin Friend.
"As this week wears on, the combination of more positive news is able to lift markets, even while the coronavirus continues to show no signs of slowing down."
Oil prices rallied more than two percent, having soared more than two per cent on Wednesday as investors bet on OPEC and other major producers led by Russia cutting output.
Observers said kingpin Saudi Arabia was looking for a reduction of half a million barrels a day, with some reports saying twice that amount was possible.
"Investors are turning optimistic that OPEC+ will deliver an appropriate response to alleviate concerns," said Innes.
However, the expectation is that prices will eventually drop owing to the hit to demand in China, the world's biggest energy consumer, with travel massively restricted throughout the country.
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