Global shares, oil dip, but growth prospects limit falls

Mon Jan 7, 2013 7:48am EST
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By Richard Hubbard

LONDON (Reuters) - World stocks and oil prices eased on Monday ending a new year rally as some investors chose to book profits, but signs of a brightening global economic growth outlook limited the falls.

Wall Street looked to set to follow a similar path after the benchmark Standard & Poor's index surged to a five-year high on Friday when data showed employers kept up a steady pace of hiring in December and the vast services sector had expanded.

The numbers compounded the effect from the last-minute deal to avert a U.S. fiscal crisis reached at the start of the year and, along with surveys showing China's factory output rising, have boosted hopes for economic expansion worldwide in 2013.

"Overall, the market's positive trend is still intact," Lionel Jardin, head of institutional sales at Assya Capital in Paris, said of the trend in stocks. "The market is ripe for a pause, but with so much cash on the sidelines, there are a lot of buyers showing up each time we have a dip."

After touching a 22-month peak last week, the FTSE Eurofirst .FTEU3 index of top European shares was down 0.2 percent at 1,164 points. Britain's FTSE 100 index .FTSE was down 0.3 percent, Germany's DAX index .GDAXI fell 0.5 percent and France's CAC 40 .FCHI eased 0.6 percent.

Asia-Pacific shares outside Japan .MIAPJ0000PUS, which reached their highest levels since August 2011 on Thursday, eased 0.1 percent, while Tokyo's Nikkei share average .N225 ended down 0.8 percent, just below a 23-month high.

MSCI's broad world equity index .MIWD00000PUS was down 0.15 percent but was still not far from an 18-month peak scaled when investors returned to the market after the immediate U.S. fiscal crisis was averted by a political deal in Washington.

Financial shares outperformed the broader market after the Basel Committee of banking supervisors agreed to give banks four more years and greater flexibility than previously envisaged to build protective cash buffers. That means they can use more of their reserves to lend and help economies grow. <ID:L5E9C61TH>   Continued...

Workers sweep the floor in front of the final stock price index after the ceremonial closing event of the 2012 stock market during a photo opportunity for the media at the Korea Exchange (KRX) in Seoul December 28, 2012. REUTERS/Kim Hong-Ji