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Shares set for second best week of 2013, dollar holds near 100 yen

World shares dipped on Friday as investors locked in profits at the end of what was set to be the second best week of the year for stocks, while the dollar held near a four-year high against the yen.

A radical monetary stimulus plan from the Bank of Japan and signs of a growing recovery in China have spurred a near 3 percent jump in the MSCI world share index .MIWD00000PUS this week and sent the yen tumbling.

As investors booked some of those sharp gains, a small 0.3 percent pull back in Asian equity markets was mirrored in Europe where there were also concerns that Cyprus could require more bailout money ahead of a meeting of European finance ministers.

The pan-European FTSEurofirst 300 .FTEU3 opened 0.4 percent lower as London's FTSE 100 .FTSE, Paris's CAC-40 .FCHI and Frankfurt's DAX .GDAXI started the day down between 0.3, 0.3 and 0.5 percent respectively. The MSCI world share index was 0.2 percent lower.

European Union finance ministers are meeting on Friday and Saturday, with Cyprus's bailout among the top agenda items.

Luxembourg's finance minister said that Europe and the International Monetary Fund could not increase their 10 billion euro ($13.13 billion) contribution to Cyprus' bailout, but economists worry more support may be required.

"There is the potential that Cyprus may need more money, and that may be a reason for investors to book a bit of profit on the back of the recent strong run," said Central Markets chief strategist Richard Perry.

In the currency market, focus remained on the yen. The BOJ last week pledged to inject about $1.4 trillion into the economy to end a long phase of deflation and achieve its target of 2 percent inflation, a move that has seen the Japanese currency slump.

By 2:30 a.m. ET the U.S. dollar which has gained about 6 percent against the yen over the past week, was off its recent highs at 99.38 yen and the euro at 139.93 yen. The euro was 0.2 percent lower against the dollar at $1.3080.

Bond markets were largely quiet with attention mainly on the finance minister meetings in Dublin. German Bund futures climbed 35 ticks to 145.63 as caution crept back in following what has been a better week for higher-yielding euro zone periphery debt.

"The Eurogroup is likely to dominate things. There's talk of this funding gap in Cyprus. I don't see a lot of good news for periphery...There could be consolidation in the market while we wait to see what the Eurogroup says," a trader said.

[Source: By Marc Jones, Reuters, London, 12Apr13]

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small logoThis document has been published on 12Apr13 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.