Asian stocks edged up on Thursday, cheered by record closes in Wall Street benchmarks after encouraging economic data, although investors kept a wary eye on the developments in the coronavirus outbreak.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 1.14% while Japan's Nikkei rose 2.07%.
Mainland Chinese shares edged up, with the bluechip CSI300 index up 0.87%, helped by policymakers' efforts to prevent heavy selling, including liquidity injections and de facto restrictions on selling.
"It is difficult for investors to sell Chinese shares now given the authorities' stance is very clear," said Naoki Tashiro, president of TS China Research.
"Still, until the spread of the virus stops, market stabilisation steps won't completely change investor psychology."
On Wall Street, far from the epicentre of the outbreak, the mood was brighter as the S&P 500 gained 1.13% to a record close of 3,334.69 while the Nasdaq Composite added 0.43% to 9,508.68, also a record high.
The ADP National Employment Report showed private payrolls jumped 291,000 jobs in January, the most since May 2015, while a separate report showed US services sector activity picked up last month. Both indicators suggest the economy could continue to grow this year even as consumer spending slows.
Traders also cited vague rumours of a possible vaccine or a drug breakthrough for the coronavirus as a trigger for Wednesday's stock rally, although they also said such catalysts were likely to simply be an excuse for short-covering.
The World Health Organization played down media reports on Wednesday of "breakthrough" drugs being discovered to treat people infected with the new coronavirus.
Another 73 people on the Chinese mainland died on Wednesday from the virus, the highest daily increase so far, bringing the total death toll to 563, the country's health authority said on Thursday.
"Despite all the efforts by the Communist Party, the virus is becoming a major global disaster. Considering workers usually start to return to hometown about a week before the Lunar New Year, many patients must have left Wuhan before its lockdown on Jan. 23," TS China Research's Tashiro said.
Statistics from China indicate that about 2% of people infected with the new virus have died, suggesting it may be deadlier than seasonal flu but less deadly than SARS, another reason investors remained relatively calm.
"The coronavirus is continuing to spread so we need to remain cautious. But markets now appear to think that there will be a quick economic recovery after a short-term slump," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
The 10-year US Treasuries yield rose back to 1.654% from a five-month low of 1.503% set last Friday.
In the currency market, the safe-haven Swiss franc and the yen retreated.
The franc eased to 0.9738 franc per dollar, having lost 0.4% on Wednesday.
The yen stepped back to 109.98 yen, compared with a three-week high of 108.305 hit on Friday.
The euro stood flat at $1.0998, having shed 0.4% in the previous session.
In commodities, US West Texas Intermediate (WTI) crude gained 2.17% to $51.85 per barrel, extending its rebound from a 13-month low of $49.31 touched on Tuesday.
Still it is down about 15% so far this year.
Copper, considered a good gauge on the health of the global economy because of its wide industrial use, showed some signs of stabilisation although it remained depressed overall.
Shanghai copper extended its rebound into the third day, rising 1% from 33-month low hit earlier this week. It is about 5% below its levels just before the start of Lunar New Year holidays.
"One has to wonder whether China can meet its trade agreement with the US to increase imports by $200 billion, which looked very difficult to begin with," said a manager at a US asset management firm, who declined to be named because he is not authorised to speak about China.
"Before the outbreak, a mini goldilocks market was everyone's consensus. But we have to see whether we need to change such a view," he added.