* Euro zone growth stalls in Q4 2009; European shares slip
* Euro on ropes as Greek debt concerns weigh
* Oil supported by growth expectations
By Emelia Sithole-Matarise
LONDON, April 7 (Reuters) - European shares bucked a rise in
world stocks on Wednesday as data showed the euro zone economy
stalled in the last quarter of 2009 while festering worries
about Greece's debt problems kept the euro weak.
The 16-member single currency bloc posted zero growth in its
gross domestic product quarter-on-quarter in the last months of
2009, rather than a previously reported 0.1 percent expansion,
the European statistics office said, highlighting the fragility
of economic recovery in the region.
Globally, the picture is more upbeat after a recent run of
strong U.S. data and signs of improving growth prospects in Asia
that helped push world stocks close to 18-month peaks.
The euro zone data put a further dampener on European shares
which were already soft on a pullback in mining and banking
stocks and renewed concerns over Greece's finances.
"The rebound in the United States is well supported by a
strong economic recovery, but it's more complicated in Europe
and the recent gains remain fragile," said Christian Jimenez,
fund manager and president of Diamant Bleu Gestion in Paris.
"The weaker euro might have had some positive effects, but
it's definitively not favourable to investments and risk taking.
I remain bullish on stocks, but vigilant and ready to get out if
the wind changes direction."
The FTSEurofirst 300 <> index of top European shares
shed 0.2 percent after hitting an 18-month high for a second
session in a row on Tuesday.
The European benchmark is up 5.3 percent so far this year.
Word stocks as measured by MSCI <.MIWD00000PUS> edged up 0.1
percent, near their highest since early October 2008.
FISCAL WORRIES
The euro <EUR=> fell to a one-week low on worries about
Greece's ability to resolve its debt crisis. The common currency
was 0.3 percent softer at $1.3354 by 1055 GMT, within sight of
an 11-month trough of $1.3265 hit late in March.
"Renewed uncertainty over Greece is hurting an already
jittery euro," said Stuart Bennett, senior FX strategist at
Credit Agricole. "Even though the market is already heavily
short of euro, there is still downside risk."
The single currency came under fresh pressure after the
Easter break on reports that Greece wanted to amend an EU-IMF
safety net deal set up late last month to help pay for its debts
in an emergency.
Although Greece denied the reports, the market paid no heed
and continued to bet on Athens having troubles cutting its debt
burden, even as its borrowing costs mount.
Investors demanded a yield around seven percent for buying
10-year Greek bonds <0#GRBMK=TWEB>. That is almost 100 basis
points above levels seen last week, and nearly 400 basis points
above German benchmark 10-year Bunds <0#DEBMK=TWEB>.
The Greek/German bond yield gap widened to as much as 408
bps on Tuesday, its widest since Greece joined the euro in 2001.
Euro-denominated gold prices retreated from a record high of
851.86 euros an ounce hit earlier as a strong dollar offset
buying linked to fear-driven diversification into hard assets
like bullion.
Oil retreated from 18-month highs around $87 while copper
prices pulled back from 20-month peaks as traders worried the
metal's recent rally may have been overdone. U.S. light crude
futures for May <CLc1> were 0.5 percent lower at $86.37 by 1050
GMT, and down from Tuesday's intraday peak of $87.09, the
highest since October 2008.
(Additional reporting by Neal Armstrong and Blaise Robinson;
Editing by Ruth Pitchford)
