GLOBAL MARKETS-Shares fall for 3rd straight day; yen at 10-week high

Thu Jun 13, 2013 10:56am EDT

* Nikkei tumbles more than 6 percent, European shares fall 1
percent
    * Strong U.S. retail sales, claims data help Wall Street
recover
    * Dollar slides to lowest vs yen since BOJ easing in early
April

    By Wanfeng Zhou
    NEW YORK, June 13 (Reuters) - Global stock markets fell for
a third straight day on Thursday and the U.S. dollar hit a
10-week low against the yen as investors unwound bets linked to
central bank stimulus measures that have buoyed many asset
markets.
    But Wall Street rebounded after the open and oil prices also
recovered, helped by stronger-than-expected U.S. data on retail
sales and jobless claims.
    Investors are trying to gauge when central banks around the
world, particularly the Federal Reserve, which meets next
Tuesday and Wednesday, will pull back on their accommodative
monetary policies.
    Concern about a pullback in central bank liquidity mounted
after recent comments from Federal Reserve Chairman Ben Bernanke
and a decision by the Bank of Japan to hold off on easing
further. It has fueled a selloff in global equities, emerging
markets, bonds and commodities, while driving the yen sharply
higher. 
    "The easy money helped us on the way up. The concern is
mounting it's going to end," said Andre Bakhos, director of
market analytics at Lek Securities in New York.
    "The action has been choppy and erratic," he said. "It's a
case of investors looking to limit exposure ahead of next week's
Fed meeting."
    The MSCI All-Country World Index fell 0.4
percent to 360.41, while emerging equities hit
11-month lows. Most emerging currencies remained under heavy
pressure, with the Indian rupee falling to a record low.
 
    The Dow Jones industrial average rose 33.79 points,
or 0.23 percent, at 15,029.02. The Standard & Poor's 500 Index
 was up 4.99 points, or 0.31 percent, at 1,617.51. The
Nasdaq Composite Index was up 9.66 points, or 0.28
percent, at 3,410.09. 
    European shares fell as much as 1.1 percent before
recovering slightly, while Japan's Nikkei fell 6.4
percent - its second-biggest daily drop in more than two years.
That rattled markets and left Asian shares at their lowest level
of the year.  
    The dollar lost 1.8 percent against the yen as
investors spooked by Japan's stock dive unwound bets the yen
would weaken. It fell as low as 93.78 yen, its lowest since
April 4, giving back almost all the gains made since the Bank of
Japan's aggressive monetary easing was announced on that day.
    The euro lost 0.4 percent to $1.3281.
    "If you look at it historically, there has never been a
period when the Fed has started to take back stimulus that has
left the markets untouched," said Hans Peterson, global head of
investment strategy at Swedish bank SEB.
    "And this time it is a bigger exercise. We have moved
markets from 2009 to 2013 on stimulus and now we are trying to
take a step into a world which is more driven by natural growth.
That transition will not be easy."
   
    Brent crude rose 19 cents to $103.68 a barrel,
having traded as low as $102.75 on reports indicating weak
demand, including a cut in the outlook for global economic
growth by the World Bank.
    U.S. crude fell 0.22 percent to $95.67 a barrel.
    Investors headed for traditional safe-haven government debt.
The benchmark 10-year U.S. Treasury note was up 9/32, the yield
at 2.1956 percent. German government bonds 
had their biggest gains in a week.
    The recent selling of euro zone periphery debt also resumed
, and Italy's borrowing costs rose at an auction
of three-year debt, although yields at a parallel 15-year sale
were little changed.
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