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GLOBAL MARKETS-World stocks flat, set for 4th quarterly rise

Published 03/31/2010, 06:54 AM
Updated 03/31/2010, 07:16 AM
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* World stocks set to post fourth quarterly rise

* Dollar hits 3-month high versus yen

* Dollar index up 4.4 in Q1, best quarterly rise in a year

By Dominic Lau

LONDON, March 31 (Reuters) - World equities were flat on Wednesday, though they were headed for their fourth consecutive quarterly rise, while the dollar hit a three-month high against the yen and Greece's borrowing costs rose on supply plans.

Copper prices retreated on concern about a supply surplus in China, the world's top consumer of industrial metals, in the last trading day of the quarter.

World stocks measured in MSCI All-Country World Index were flat, though the benchmark is set to post its best monthly rise since July last year and on track to register a fourth straight quarterly gain.

The 2.7 percent gain for world stocks in the first quarter of 2010 outpaces a 2 percent rise in emerging market shares for the same period.

U.S. stock index futures were flat to down 0.14 percent, indicating a softer opening for Wall Street ahead of the monthly ADP Employment report, due at 1215 GMT.

In Europe, the FTSEurofirst 300 index advanced 0.2 percent. The benchmark is up 3.4 percent this quarter, also on track for the fourth consecutive quarterly rise.

"Markets were rocky at the peak of the Greek crisis, but now volumes have fallen again, the news flow has dried up, there is no catalyst," said Jacques Henry, analyst at Louis Capital Markets in Paris.

"Unless we get some sort of surprise on the macro data front, like with the payrolls this week, the market might move sideways for a bit."

Tokyo's Nikkei average hit an 18-month intraday high before paring gains to end 0.1 percent lower. The Japanese blue chip index gained 5.2 percent in January-March.

The ADP report is widely seen as a harbinger for the U.S. March non-farm payrolls numbers, which will be released on Friday when most equity markets around the world are closed.

The ADP job report is expected to show the private sector created 40,000 jobs in March as the world's largest economy emerges from recession.

YEN WEAK, GREEK SPREADS WIDER

The dollar rose 0.6 percent at 93.40 yen. It hit 93.60 yen on electronic trading platform EBS, its highest since early January, and sterling hit its highest in a month at 141.71 yen.

"We've seen a pick-up in dollars from Japanese investors, who are seen increasing dollar-denominated assets on an unhedged basis for the next fiscal year," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ in London.

The euro held well above $1.34 as traders said month-end fixing sales of dollars weighed on the greenback.

Against a basket of major currencies, the dollar was down 0.2 percent. It has climbed 4.4 percent so far this quarter, the best three-month gain since the first quarter of 2009.

The premium investors demand to buy Greek government debt rather than euro zone benchmark German Bunds rose to 345 basis points, up from 338 bps at Tuesday's settlement, while the cost of insuring Greek debt against default also rose, up about 10 bps to 343.9 bps from New York close.

The head of Greece's debt agency said Athens will issue a global dollar-denominated bond in late April or early May.

Yields on 10-year benchmark U.S. Treasuries were steady at 3.861 percent, while those on 10-year Bunds were also steady at 3.103 percent.

Crude prices gained 0.6 percent to trade near $83 a barrel and are up 4.4 percent this quarter, heading for their fifth consecutive quarterly gain as recovering demand outweighs ample supplies and concern over monetary tightening in major economies.

Copper prices broke a four-day winning run, down 0.4 percent. The metal, however, is up 6 percent so far in the first quarter of this year. (Additional reporting by Blaise Robinson in Paris, Tamawa Desai, William James and Neal Armstrong in London; Editing by Toby Chopra)

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