* European shares edge up after strong German business
* Wall Street seen opening higher
* Slower China house price rise hits Asian shares, yen rises
By Nigel Stephenson
LONDON, Feb. 24 European stocks rose and the
euro strengthened against the dollar on Monday as a surprise
improvement in German business morale added to optimism over the
euro zone's recovery, although worries over credit tightening in
China kept investors wary.
In Ukraine, where ousted President Viktor Yanukovich was on
the run and being hunted for "mass murder", the country's dollar
bonds rose, debt insurance costs fell and the hryvnia currency
weakened but there was little impact on developed markets.
German Bund futures fell to the day's low after the
Ifo business climate index in Europe's powerhouse economy rose
to 111.3 from 110.6 last month. The euro firmed to $1.3769
but later gave back gains to trade flat to $1.3726.
The German data lifted European shares out of a funk caused
by signs of credit restrictions in China's property sector. But
sizeable falls in carmaker Volkswagen's shares after
a disappointing 2014 outlook and bank HSBC after lower
than expected 2013 profits, limited gains.
Gold hit its highest in nearly four months on worries over
Chinese growth and the pace of the U.S. recovery but later
Wall Street looked set for early gains, with futures
on the main indexes about 0.1 percent higher.
Earlier, shares in Asia fell and the Japanese yen rose as
growth in Chinese home prices eased for the first time in 14
months - a sign Beijing's campaign to tighten credit conditions
may be starting to bite.
Asian shares excluding Japan fell 0.4
percent and most Asian emerging markets currencies were lower.
Tokyo's Nikkei index fell 0.2 percent as the yen, which
is often sought in times of market stress, strengthened.
"Dollar-yen moves on risk aversion, and when Tokyo stocks
are down dollar-yen is down, even if the reason is a drop-off in
activity in its (Japan's) major export market," said Marshall
Gittler, head of global FX strategy at IronFX Global.
In Europe, the FTSEurofirst 300 index of top stocks
edged up 0.01 percent. Volkswagen was down 5.8 percent.
"The weak guide for 2014 and the rich bid for Scania will
likely dent sentiment and perpetuate the view that management is
more focused on being big at the expense of shareholder
returns," analysts at Barclays said in a note.
Spanish government bond yields fell, approaching recent
eight-year lows, after Moody's raised Spain's credit rating in a
further endorsement of Madrid's efforts to revive an economy
once at the sharp end of the euro zone debt crisis.
"It's certainly reinforcing positive sentiment in Spain.
Moody's has recognised not only the economic recovery but also
the structural reforms ... and the fact that they're sticking to
their guns on the fiscal deficit," said Nick Stamenkovic, bond
strategist at RIA Capital Markets in Edinburgh.
Spain's 10-year government bond yields last
traded 0.2 basis points lower at 3.56 percent, lifting off lows
after final euro zone inflation for January came in higher than
forecast, reducing the likelihood of the European Central Bank
easing monetary policy further.
The yen was last up 0.1 percent at 102.48 to the dollar,
which was up 0.1 percent against a basket of currencies.
CHINA SHARES SINK
China shares sank to a two-week low as property and banking
stocks slipped on mainland news reports that stoked fears banks
had stopped extending loans to property-related companies.
"I would get out of interest rate-sensitive sectors. It's
very hard to navigate right now with policy risk on the rise,"
said Hong Hao, Hong Kong-based chief equity strategist at Bank
of Communication International.
Group of 20 finance ministers and central bankers committed
to spurring faster global growth at a two-day meeting in Sydney
over the weekend.
The final communique said the G20 would increase investment
and employment, generating more than $2 trillion in additional
output over five years while creating tens of million of new
Brent crude fell 0.1 percent to $109.78 a barrel.
Gold rose to $1,334.50 an ounce, its highest since Oct.
31, before retreating to $1,332.60.