* Global stocks wallow in negative territory
* G20 to keep emergency economic supports in place
* Dollar broadly weaker, crude oil steadier after fall
* MSCI world stock index down 0.5 pct on day
By Ian Chua
LONDON, Sept 25 (Reuters) - Global stocks struggled near a
1-1/2 week low on Friday despite a pledge by the Group of 20
countries to keep emergency economic stimulus in place until a
durable recovery is secured, helping underpin government bonds.
Weak U.S. housing data on Thursday and plans by world
central banks to scale back infusions of U.S. dollars into their
banking system kept investors worried.
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"There are concerns about the sustainability of the economic
upturn as it is only in its infancy," said Nick Stamenkovic,
bond strategist at RIA in Edinburgh.
"The fact that some of the short-term liquidity is being
removed is to some extent maybe weighing on the equity market,
which seems to be running out of steam, and that is clearly
providing a more government bond supportive environment."
The MSCI all-country world stock index <.MIWD00000PUS> fell
0.5 percent to 284.81, having earlier plumbed 284.44 -- a low
last seen on Sept. 15.
The FTSEurofirst 300 index <> of top European shares
shed 0.4 percent with Germany's DAX <> sliding 0.5
percent.
The MSCI world stock index is down 1.8 percent so far this
week and on track for the biggest weekly decline since the week
of July 12. It is however still up 25 percent year-to-date and
not far off a near one-year peak of 292.79 reached on Wednesday.
Despite an eight-week streak of outflows from safe haven
money market funds being broken, equity funds took in $5.42
billion in the week to Sept. 23, with emerging market equity
funds having their biggest week of inflows since early June,
fund tracker EPFR Global said in a note. []
Emerging shares <.MSCIEF>, which earlier this week hit a
12-month high, were down 0.2 percent, having also hit a 1-1/2
week low earlier.
DOLLAR SOFT, BONDS GAIN
In currency markets, the dollar was a touch weaker against a
basket of major currencies. The euro was up 0.1 percent at
$1.4672 <EUR=>, not far off a one-year high above $1.48 set on
Wednesday.
"The (G20) is making clear that stimulus will stay in place
until a recovery is sustainable," said Michael Klawitter, senior
currency strategist at Commerzbank in Frankfurt, adding that
this suggested that interest rates, including those for the
dollar, would remain low for a while yet.
The embattled sterling remained an open target after Bank of
England's Mervyn King said on Thursday that a weak currency was
helping the domestic economy. After dropping 1.8 percent on
Thursday, the pound fell a further 0.3 percent to $1.6004
<GBP=>.
Underpinned by weakness in stocks, government bond prices
held firm, keeping yields under pressure. The U.S. 10-year yield
<US10YT=RR> edged down 1 basis point to 3.370 percent, while the
German equivalent <EU10YT=RR>, the euro zone's benchmark,
slipped 2 basis points to 3.284 percent.
U.S. crude oil <CLc1> gained 18 cents to $66.06 a barrel
after having tumbled more than 4 percent to an eight-week low
the previous day when an unexpected fall in U.S. home sales in
August fuelled fears about the pace of economic recovery in the
world's top oil consumer nation.
(Additional reporting by Naomi Tajitsu in LONDON and Kevin
Plumberg in HONG KONG; Editing by Toby Chopra)
