* Early signs of virus peaking in Europe, New York
* Euro races higher in first gains in seven sessions
* World FX rates in 2020 http://tmsnrt.rs/2egbfVh (Updates prices, changes comment, byline, dateline)
By Rodrigo Campos
NEW YORK, April 7 (Reuters) - World stock markets posted sharp gains on Tuesday as signs of progress in curbing the spread of the novel coronavirus in both Europe and the United States fueled investors' appetite for risk.
Oil prices climbed on hopes of a deal to decrease supply, while the euro jumped against the greenback after six sessions of declines. USD/
Japan's Nikkei .N225 posted a 2% gain overnight as its government promised a near $1 trillion stimulus package - equal to a fifth of its gross domestic product. China reported no coronavirus deaths for the first time since the pandemic began and a drop in new cases, a day before Wuhan, where the virus emerged in December, was set to lift its lockdown. France's coronavirus figures on Monday showed that the rate of increase in fatalities sped up again after several days of slowing, even as the increase in people needing intensive care continued to decelerate.
"This is looking more like a bear market rally," said Nancy Perez, senior portfolio manager at Boston Private Wealth in Miami.
"I think there's still a lot of headwinds that could cause this market to re-test the lows. There will be the initial resumption of business on paper, but then the actual actions will have to follow."
Worldwide, the virus has infected more than 1.3 million people and killed over 74,000, and though the numbers are still rising in many highly populated countries, some tentative improvements have given hope. Dow Jones Industrial Average .DJI rose 506.01 points, or 2.23%, to 23,186, the S&P 500 .SPX gained 45.28 points, or 1.70%, to 2,708.96 and the Nasdaq Composite .IXIC added 64.89 points, or 0.82%, to 7,978.13.
The pan-European STOXX 600 index .STOXX rose 1.55% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 2.03%.
Emerging market stocks rose 3.20%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 2.7% higher, while Japan's Nikkei .N225 rose 2.01%.
With market optimism on the rise, the U.S. dollar dropped and riskier currencies outperformed as risk appetite improved on hopes that lock-downs may be slowing the spread of the coronavirus in some countries.
"Fatalities in the UK remain relatively low and slowed for the second day, although the apex is still thought to be about 10 days away,” Win Thin, global head of currency strategy at Brown Brothers Harriman in New York, said in a report.
“High-frequency data on coronavirus infections and death rates continue to stabilize,” he said.
The dollar index =USD , tracking the greenback against six major currencies, fell 0.675%, with the euro EUR= up 0.83% to $1.0881.
The Japanese yen strengthened 0.17% versus the greenback at 109.06 per dollar, while Sterling GBP= was last trading at $1.232, up 0.74% on the day.
OIL WOBBLY
Oil prices were in and out of negative territory as hopes that the world's biggest producers would agree to cut output were countered by analyst fears that a global recession in the wake of the coronavirus crisis could be deeper than expected.
U.S. crude CLc1 was up 0.77% at $26.28 per barrel and Brent LCOc1 was at $32.95, down 0.3% on the day.
U.S. Treasury yields rose as the bond market mulled a looming supply deluge and as stocks continued their rise.
Benchmark 10-year notes US10YT=RR last fell 26/32 in price to yield 0.7581%, from 0.678% late on Monday. The 30-year bond US30YT=RR last fell 1-20/32 in price to yield 1.3444%, from 1.285%.
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https://reut.rs/3bVMQ0k Coronavrus impact on global markets
https://reut.rs/2V91s5N
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