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GLOBAL MARKETS-Flat in holiday trade, data eyed

Published 05/01/2009, 05:33 AM
Updated 05/01/2009, 05:40 AM

(Removes reference to Bund futures in last para as market closed for public holiday)

* MSCI world equity index flat in holiday weekend trade

* U.S. ISM data eyed after upbeat Chinese, Korean figures

* Dollar eases versus basket of currencies

By Sebastian Tong

LONDON, May 1 (Reuters) - Global markets were flat on Friday in subdued holiday weekend trading after growing hopes of a global economic recovery propelled shares over 11 percent in the previous month.

Trading was thin with markets around the world closed on Friday for a holiday -- Japan and London markets close on Monday -- but sentiment remained supported by encouraging data from Asian export powerhouses China and South Korea.

"Expect a thin trading session today as traders trim their positions ahead of the bank holiday on Monday ... Investors will ask whether the recent gains are sustainable," said Manoj Ladwa, a senior trader at ETX Capital in London.

The MSCI world equity index, which ended April with the biggest monthly gain in its 20-year history, was down 0.02 percent by 0920 GMT.

The pan-European FTSEurofirst 300 index eased 0.1 percent after hitting their highest in over four momths in the previous session while emerging shares were 0.02 percent firmer, hovering at their highest since mid-October. A hopeful note sounded by the Federal Reserve on the hard-hit U.S. economy helped investors overcome fears over the economic impact of the spread of influenza A, widely known as swine flu.

Investors took note of U.S. auto giant Chrysler's bankruptcy filing on Thursday but also focused on cheerier economic news, including a smaller-than-expected drop in South Korean exports in April and a monthly survey of Chinese manufacturing suggesting an improving outlook.

Optimism that the global downturn may have seen its worst was also spurred by the fall in the number of U.S. jobless claims, which indicated that the pace of layoffs was easing.

However, April factory survey figures expected from the U.S. Institute for Supply Management (ISM) at 1400 GMT will provide further clues to the health of the world's biggest economy while the release of results of U.S. stress tests on banks next week will reveal the state of the global financial system.

Growing investor appetite for higher-yielding assets kept up the pressure on the dollar, pushing the unit 0.1 percent lower against a basket of major currencies.

U.S. crude oil stayed above $50 a barrel, reversing previous session gains while emerging sovereign market spreads traded 1 basis points wider at 530 bps above U.S. Treasuries. (Reporting by Sebastian Tong; editing by Stephen Nisbet)

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