* Libya declares cease-fire, stocks rise
* G7 intervenes to weaken yen
* Dollar spikes more than 3 percent higher
* Oil prices drop after Libya move
(Updates with U.S. markets' open, adds New York dateline,
byline)
By Emelia Sithole-Matarise and Al Yoon
LONDON/NEW YORK, March 18 (Reuters) - Global stocks rose on
Friday after a Libya ceasefire reduced tension in the region
and the Group of Seven calmed markets about Japan's nuclear
crisis, while G7 intervention broke the yen's rise.
Oil fell after Libya declared a cease-fire in the country
to protect civilians and comply with a United Nations
resolution passed overnight.
"The end of military action is a great step," said Jim
Vogel, interest rate strategist with FTN Financial in Memphis,
Tennessee. "Now, the market needs to figure out whether this
will lead to a quick, visible end game."
Brent crude <LCOc1> had surged above $116 a barrel on
worries of escalating unrest in oil-rich countries after the
U.N. approved military action to contain Libya's Muammar
Gaddafi. It traded down 0.5 percent at $114.31 a barrel after
the cease-fire. U.S. crude fell 0.5 percent to $100.88.
The dollar was last up nearly 3 percent at 81.12 yen,
retreating from a session high of around 81.98 yen <JPY=>,
following the G7 announcement, which came just as the Tokyo
stock market opened.
The show of solidarity by the G7 major developed economies
to support Japan through its biggest crisis since World War Two
comes a day after the yen soared to a record 76.25 per dollar
in chaotic trading. It is the first coordinated currency
intervention by the G7 in a decade.
The G7 "is just helping sentiment, and stocks sensitive to
risk will push on. But optimism is going to be guarded as there
are no firm resolutions surrounding the Japanese nuclear crisis
and the Middle East, and anything can happen on the weekend,"
said Giles Watts, head of equities at City Index in London.
The Dow Jones industrial average <> jumped 139.18
points, or 1.18 percent, to 11,913.77. The Standard & Poor's
500 Index <.SPX> was up 13.69 points, or 1.07 percent, at
1,287.41 and the Nasdaq Composite Index <> was up 26.28
points, or 1.00 percent, to 2,662.33.
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-- G7 intervention http://link.reuters.com/sub68r
-- Japan disaster http://r.reuters.com/fyh58r
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The euro <EURJPY=R> was last up 3.5 percent at 114.63 yen,
having jumped to a session high of 115.50 yen earlier from
around 114.70. Traders noted the scale of intervention was so
far a tame effort to stem the yen's surge.
Some market observers said even massive official selling
might not restrain the yen for long, pointing to Japan's last
intervention in September 2010 when it sold a huge 2.1 trillion
yen, or around $25 billion worth, but only managed to push the
dollar up from 82.85 to 85.77 yen.
"It would need to be concerted and aggressive....and even
then I'm sceptical," said Richard Wiltshire, a currency trader
at ETX Capital in London.
A New York Federal Reserve spokesman said the U.S. central
bank had joined the G7 in intervening to weaken the yen.
MIDDLE EAST WEIGHS
Japan's Nikkei share index <> climbed 2.7 percent,
recouping some of the week's losses as Japan reeled from the
aftermath of an earthquake, tsunami and nuclear power plant
crisis. []
World stocks as measured by MSCI <.MIWD00000PUS> gained 1
percent.
European equities pared earlier gains after China's central
bank raised lenders' required reserve ratios. Europe's
FTSEurofirst 300 <> climbed 0.8 percent.
Demand for the safety of government debt eased. The price
drop pushed benchmark U.S. 10-year Treasury note yields 0.04
percentage point higher to 3.30 percent.
The U.N. Security Council passed a resolution endorsing a
no-fly zone for Libya. It authorised "all necessary measures"
to protect civilians against Gaddafi's forces. []
Gold <XAU=> rose $15.05 to $1,417.40 an ounce but was off a
record around $1,444 hit last week.
(Additional reporting by Anirban Nag, Joanne Frearson and
Chris Reese; Editing by Kenneth Barry)
