Wednesday April 1, 09:53 AM
GLOBAL MARKETS-Jitters hit shares after best month in 9 years
By Jeremy Gaunt, European Investment Correspondent
LONDON, April 1 (Reuters) - World stocks kicked off a new quarter on Wednesday with strong gains in Japan and sharp losses in Europe after registering their best monthly performance since
December 1999.
MSCI's all-country world index was down slightly on the day having risen 7.94 percent in March.
Its emerging market counterpart was up 0.5 percent. It gained 14.15 percent last month, the highest monthly rise since December 1993.
Investors were firmly focused on the meeting of G20 leaders in Britain due to begin later in the day, looking for more confirmation there will be coordinated efforts to ward off a prolonged slump in world economic growth.
'The danger is that the outcome vastly disappoints the hype,' Gary Dugan, chief investment officer of Merrill Lynch Global Wealth Management, said in a preview note.
There is the potential of a spat at the meeting over how much debt governments should take on in providing stimuli to their ailing economies.
Expectations of a decision soon on struggling U.S. automakers lifted Japanese stocks, underlining the impact that government intervention in economics currently has on markets.
The New York Times said the White House was looking to ease U.S. auto maker General Motors (NYSE: GM - news) into a 'controlled' bankruptcy.
Japan's Nikkei (news) , which contains major Japanese automakers, gained 3 percent.
The mood in Europe, however, was sombre. The pan-European FTSEurofirst 300 index of top shares was down 1.2 percent, although this followed a 3.5 percent rise in the previous session.
STRONGER DOLLAR
The dollar was supported by the uncertainty over the fate of U.S. carmakers, which prompted investors to seek perceived safer assets and shun high yielders.
The euro backtracked from sharp gains the previous day, as European share prices fell. It was down some 0.5 percent at $1.3181. Against the yen, the euro was down some 0.7 percent at 130.16 yen.
'With (GM) bankruptcy as a viable option, the news has helped sour risk sentiment,' said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi (Munich: 857124 - news) .
'The near-term impact will be quite negative,' he added.
On euro zone government debt markets, the two-year Schatz yield was down 4 basis points at 1.245 percent.
(Additional reporting by Tamawa Desai)
(To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund Hub click on http://blogs.reuters.com/hedgehub)
Keywords: MARKETS GLOBAL
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