* European shares, DAX hit record highs
* Beijing pledges tax, fee cuts
* Euro zone bond yields edge up
By Ritvik Carvalho
LONDON, Feb 17 (Reuters) - Global shares inched higher on Monday as the promise of further policy stimulus from China to counteract the economic hit from a coronavirus outbreak calmed nervous investors.
Trading is expected to be light, with U.S. stocks and bond markets shut for a public holiday.
Both the pan-European STOXX 600 .STOXX index and Germany's DAX .GDAXI reached record highs before paring some gains. .EU The MSCI All-Country World Index .MIWD00000PUS , which tracks shares across 47 countries, was up 0.01% by midday.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS advanced 0.14% to near last week's peak of 558.30, its highest since late January.
The gains were led by China, whose blue-chip index .CSI300 climbed 2.25% after the country's central bank lowered a key interest rates and injected more liquidity into the system. whetting risk appetite was an announcement by China's finance minister on Sunday that Beijing would roll out tax and fee cuts. are mindful of the fact the Chinese authorities intervened in the financial markets at the beginning of the month when the domestic stock markets reopened after the Lunar New Year celebrations," said David Madden, market analyst at CMC Markets in London.
"Some dealers hold the view that Beijing will intervene in the markets again should the situation get much worse, which could explain the resilience of equity markets."
Fears about the jolt to the world economy from the coronavirus lingered, though, as the number of reported new cases in China rose to 2,048 as on Sunday from 2,009 the previous day. latest numbers from the Hubei province still suggest that the infection pace is slowing after the sudden jump following the methodology changes last week," Danske Bank said in a research note, highlighting that the number of new cases within China is the lowest since 23 January.
Restrictions were tightened further in Hubei over the weekend. Most vehicles were banned from the roads and companies told to stay shut until further notice.
Japan's Nikkei .N225 fell 0.7% after its economy shrank at the fastest pace in almost six years in the December quarter. The slowdown in the world's third-largest economy came amid concern the coronavirus effects will hurt output and tourism, stoking fears Japan may slump into recession.
The coronavirus also led trade-dependent Singapore to downgrade its 2020 economic growth forecast. China's economy is widely expected to slow sharply as well. RUN
South Korea's KOSPI index ended mostly flat. Australian, Singapore and Malaysian share indexes weakened. .AXJO .STI .KLSE
Asia's woes have yet to spread to the United States, though. Wall Street indexes scaled record highs. .N
Talk of a middle class tax cut and a proposal to encourage Americans to invest in stocks boosted equity markets late last week, Betashares chief economist David Bassanese said.
Bassanese had misgivings about the plan, saying it reminded him of former U.S. President George Bush encouraging Americans to buy a home during a housing boom.
"It adds to my suspicion that this decade-long bull market could eventually end via a blow-off bubble, driven by central bank persistent low interest rate policy," he said in a note.
Later in the week, flash manufacturing activity data for February are due for the euro zone, the United Kingdom and the United States. They are likely to capture some of the early impact of the viral epidemic.
Action was relatively muted in currency markets, with the dollar up against the yen at 109.88 JPY= and the pound at $1.3015. It gained against the euro to $1.0839. GBP= EUR=
The risk-sensitive Aussie AUD=D3 , which is also played as a liquid proxy for Chinese assets, ticked up 0.1% to $0.6719.
That left the dollar index flat at 99.135.
In commodities, gold XAU= fell 0.25% to $1,580.51 an ounce. GOL/ Brent crude LCOc1 was lower by 0.1% at $57.27 a barrel and U.S. crude added 0.1% to $52.09. O/R
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