* European shares set to bounce back
* Asian stock markets: tmsnrt.rs/2zpUAr4
* China, other Asian markets closed for Lunar New Year holiday
* Too early to declare China virus a global emergency -WHO
By Tomo Uetake
TOKYO, Jan 24 (Reuters) - Asian shares steadied on Friday in holiday-thinned trade for the Lunar New Year, despite fears that a new coronavirus from China could spread rapidly as millions of people travel over the week-long break.
Most markets had stabilized overnight, as investors took some solace from the World Health Organisation (WHO) labelling the outbreak an emergency for China, where 25 people have died and more than 800 have been infected, but not, as yet, for the rest of the world.
European shares, which had closed before the WHO announcement, were expected to rebound on Friday, with major European stock futures trading up around 0.7-0.9%, with a more positive tone.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.12%, while Japan’s Nikkei gained 0.13% and Australian stocks added a marginal 0.04%.
Trade in Asia was already slowing down for the Lunar New Year holiday, with financial markets in mainland China, Taiwan and South Korea closed on Friday.
Hong Kong’s Hang Seng ended up 0.15%, trading for a half-day due to the holiday.
The stance taken by WHO over epidemic provided at least temporary relief to the U.S. markets.
The Nasdaq Composite rose 0.20% to a record closing high, while the S&P 500 added 0.11% and the Dow Jones Industrial Average eased 0.09%.
“Investors are still worried that the outbreak of coronavirus will dampen consumption in China when the Chinese economy has been already cooling down,” said Yasuo Sakuma, chief investment officer at Libra Investments in Tokyo.
Indeed, National Australia Bank’s research team tentatively estimated China’s GDP growth for the first quarter could be hit by around 1 percentage point by this deadly coronavirus outbreak.
“The impact on Chinese growth could be significant given the outbreak coincides with the Chinese New Year,” said Tapas Strickland, NAB’s director of economics in Sydney.
“Measures to isolate the outbreak has meant 26 million people in cities or near urban areas are in lockdown or have limited travel. New Year festivities are also curbed in Beijing and Macau.”
In the currency market, the concerns about the virus supported the safe-haven yen.
The Japanese currency traded at 109.52 per dollar, having risen to a two-week high of 109.26 yen on Thursday.
The euro fell to a seven-week low versus the dollar of $1.1036 overnight after the European Central Bank left its policy rates unchanged but President Christine Lagarde struck a slightly dovish tone than some had expected.
The common currency last stood at $1.1048, down 0.10% on the day.
The offshore yuan softened to 6.932 per dollar, one day after hitting a 2-1/2 week low of 6.942 yuan.
Coronavirus fears continued to weigh on commodity prices.
Oil prices staged a slight rebound on Friday, helped by a decline in U.S. crude stockpiles, but were on track to fall up to 5% for the week on worries that the China coronavirus may curb travel, fuel demand and economic prospects.
Brent crude futures rose 0.40% to $62.29 a barrel after falling 1.9% the previous session. U.S. West Texas Intermediate (WTI) futures were 0.43% higher at $55.83 a barrel. The contract fell 2% on Thursday and was down 5% for the week.
Elsewhere, copper prices fell to their lowest in more than six weeks overnight.
Reporting by Tomo Uetake; Editing by Simon Cameron-Moore and Richard Pullin