Further easing of investor concerns over the impact of the new coronavirus outbreak in China allowed US stock to edge to fresh records on Tuesday, continuing a global recovery.

And cautious comments on the fallout from the virus by US Federal Reserve Chairman Jerome Powell added to the sense of calm.

The Fed is "closely monitoring" the virus, which he said could "lead to disruptions in China that spill over to the rest of the global economy," Powell told US lawmakers, adding that it was too soon to know how much it would impact the domestic economy.

But that assessment was less gloomy than expected.

Alan Skrainka of Cornerstone Wealth Management described Powell's testimony as not "a newsmaking commentary and that's why the market is relatively mixed today."

Meanwhile, a US federal judge's ruling that Sprint and T-Mobile can merge to create the country's third-largest telecom sent both their share prices climbing.

The broad-based S&P 500 and the tech-rich Nasdaq both hit records, albeit just a few tenths of a percentage point over their previous peaks, while the Dow Jones Industrial Average finished flat.

The freshly-named COVID-19 virus that emerged in central China has spooked equity and oil markets for weeks as it spread to more than two dozen countries.

More than 42,000 infections have been confirmed so far in mainland China and President Xi Jinping has described the situation in Hubei, the outbreak epicenter, as "still very grave."

"World health officials have learnt a lot from past experiences, they've moved relatively aggressively to contain the virus," Skrainka said, adding that investors are emboldened by solid job and corporate profit numbers.

London's stock market gained 0.7 percent, Frankfurt added 1.0 percent to come within reach of a new record and Paris was nearly 0.7 percent higher.

"You just can't keep equity markets down these days," said Neil Wilson, chief market analyst at Markets.com.

But the US Federal Trade Commission raised fears of market turbulence when it made the surprise announcement that it would review acquisitions by the five Big Tech firms over the past decade.

However, the impact of that news was mixed: while Apple, Facebook and Microsoft closed lower, Amazon and Google-parent Alphabet saw their share prices rise.

Meanwhile, in China the world's second-largest economy sputtered back to life from a forced extension to the Lunar New Year holiday because of the virus outbreak, which has killed more than 1,000 people and disrupted major global supply chains.

Hong Kong closed up 1.3 percent, while mainland China's benchmark Shanghai Composite Index was 0.4 percent higher. Tokyo was closed for a public holiday.

China, the world's largest importer and consumer of oil, was already battling an economic slowdown when the coronavirus emerged, and the outbreak intensified fears of a decline in demand, which has caused oil prices to tumble in recent weeks.

Asian markets bounce back
Asian markets bounced back Tuesday but concerns remain about the economic impact of the coronavirus outbreak in China. Photo: AFP / STR

New York - Dow: FLAT 0.1 percent at 29,276.34 (close)

New York - S&P 500: UP 0.2 percent at 3,357.75 (close)

New York - Nasdaq: UP 0.1 percent at 9,638.94 (close)

London - FTSE 100: UP 0.7 percent at 7,499.44 points (close)

Frankfurt - DAX 30: UP 1.0 percent at 13,627.84 (close)

Paris - CAC 40: UP 0.7 percent at 6,054.76 (close)

EURO STOXX 50: UP 0.9 percent at 3,825.84 (close)

Hong Kong - Hang Seng: UP 1.3 percent at 27,583.88 (close)

Shanghai - Composite: UP 0.4 percent at 2,901.67 (close)

Tokyo - Nikkei 225: Closed for public holiday

Euro/dollar: UP at $1.0914 from $1.0911 at 2200 GMT

Pound/dollar: UP at $1.2953 from $1.2915

Euro/pound: DOWN at 84.25 pence from 84.49 pence

Dollar/yen: UP at 109.78 yen from 109.77 yen

Brent Crude: UP 1.7 percent at $54.14 per barrel

West Texas Intermediate: UP 0.7 percent at $49.91

Copyright AFP. All rights reserved.