GLOBAL MARKETS-G20, China growth, euro zone debt in focus

Published 11/11/2010, 06:34 AM
Updated 11/11/2010, 06:40 AM
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* G20, China growth, euro zone debt in focus

* Word stocks rise, Europe flat

* Copper at record high, oil gains

By Jeremy Gaunt, European Investment Correspondent

LONDON, Nov 11 (Reuters) - European stocks edged lower on Thursday, with Wall Street also set for modest losses, while the dollar firmed and copper prices pushed to a record high.

The moves reflected three drivers of financial markets -- evidence of strong Chinese growth, pressures on euro zone peripheral debt and G20 currency squabbles.

Leaders of the Group of 20 developed and developing nations were meeting in South Korea to try to sort of disagreements over policy that have seen both the United State and China accused on artificially weakening their currencies for trade advantage. [ID:nnN10121378]

The spats have put at risk the international cooperation fostered as countries struggled to contain the financial crisis and global recession.

"The U.S. no longer appears to have the clout to push through its agenda. The G20 is unlikely to adopt targets on current account imbalances," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp.

The dollar was slightly higher -- up 0.3 percent against a basket of major currencies <.DXY> -- but still 12 percent weaker than its June high when it was used as a safe haven in the Greek financial crisis.

Euro zone troubles are haunting markets again because Irish debt is under intense pressure despite a huge bank recapitalisation programme.

The cost of insuring Spanish, Portuguese and Irish debt against default hit record highs.

The euro was 0.2 percent lower against the dollar at $1.3749 partly as a result.

STOCKS FIRM

The contagion was limited, however. European shares <.FTEU3> edged just 0.2 percent lower and Japan's Nikkei <.N225> closed at a 4-1/2 month high.

MSCI's all-country world stock index <.MIWD00000PUS> was up 0.2 percent.

China, meanwhile, was driving some commodities higher after reports that China's industrial production grew 13.1 percent in October from a year earlier.

London copper rose more than 2 percent on Thursday to a record high and crude oil scaled a 25-month high.

"I don't think it's the feeding frenzy we had in 2008 but we are possibly in a range between $80-$95 a barrel," said Christoper Bellew, a broker at Bache Commodities, referring to oil prices.

U.S. crude was trading around $88.50 a barrel . (Editing by Mike Peacock)

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