By Xie Yu and Anna Hirtenstein 

Global stocks extended gains Tuesday as early indications that the spread of the coronavirus pandemic was slowing helped buoy markets.

Stock futures tied to the Dow Jones Industrial Average index rallied 2.8%, a day after the blue-chips index jumped almost 8%. The pan-continental Stoxx Europe 600 advanced 3%, and major Asian stock benchmarks closed higher.

Authorities have warned that the coronavirus infections are likely to peak in the coming week in both the U.S. and the U.K. Meanwhile, other hard-hit countries in Europe including Italy and Spain have reported a slowdown in new infections following strict containment measures, leading to speculation that lockdowns may be eased in a few weeks.

"It's hard to reject the view that things are improving. Markets have been celebrating this in the last couple of days," said Paul O'Connor, head of multiasset at Janus Henderson.

Still, markets are likely to remain turbulent, he said. "Uncertainty really compresses investors' time horizons and basically means that people are reacting to whatever's in front of them at the moment," according to Mr. O'Connor.

The yield on the 10-year U.S. Treasury note rose to 0.742%, from 0.675% Monday.

Oil prices also ticked higher, with the global benchmark Brent crude advancing almost 2% to trade at $33.64 a barrel.

The spread of the virus in the U.S. is a crucial variable for investors, with more than a quarter of global cases now there, according to Paul Hsiao, an economist at PineBridge Investments. Investors will focus on the effectiveness of health-care policy, as well as fiscal and monetary responses, he said.

Later in the day, the eurozone's finance ministers are scheduled to hold a meeting to discuss a plan for collective aid to prop up the bloc's economy. While Germany has historically disagreed with issuing common debt, leaders are expected to discuss other means of channeling funds to the continent's worst-hit areas.

A key question is whether leaders will agree to transfer capital from Europe's richer nations to the poorer ones, or if they will help arrange cheap loans that will add to the debt pile of vulnerable countries such as Italy, said Peter Schaffrik, global macro strategist at RBC Capital Markets. "I'm more hopeful than I've ever been that proper transfers could come about, the situation is so dire," he said.

In Asia, major markets closed higher on Tuesday. Japan's Nikkei 225 and China's Shanghai Composite both rose 2% Tuesday.

"People are trying to identify risks and opportunities now," said Bruce Pang, head of macro and strategy research at China Renaissance Securities. The outbreak's arc in China shows that the new coronavirus and measures to contain it would lead to slower growth, rising unemployment, sluggish demand, disrupted supply chains and more defaults, he cautioned.

At the same time, "China's case shows when new infections peaked out, the market would bottom out," and this is what global investors now expect, Mr. Pang added.

Write to Xie Yu at Yu.Xie@wsj.com and Anna Hirtenstein at anna.hirtenstein@wsj.com

(END) Dow Jones Newswires

April 07, 2020 05:39 ET (09:39 GMT)

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