* Libya declares ceasefire, stocks rise
* G7 intervenes to weaken yen
* Dollar jumps more than 3 percent vs. yen
* Oil rally reversed after Libya move
(Updates prices)
Al Yoon
NEW YORK, March 18 (Reuters) - Global stocks rose on
Friday after a Libya ceasefire reduced tension in the region
and the Group of Seven intervened to break the yen's rise,
calming markets.
World stocks as measured by MSCI index <.MIWD00000PUS>
gained 0.9 percent.
European equities pared earlier gains after China's
central bank raised lenders' required reserve ratios. Europe's
FTSEurofirst 300 <> climbed 0.5 percent.
Oil fell from earlier highs after Libya declared a
cease-fire in the country to protect civilians and comply with
a United Nations resolution passed overnight.
"That (Mideast unrest) quieting down and Japan quieting
down will lead to buying," said Stephen Massocca, managing
director at Wedbush Morgan in San Francisco.
Brent crude <LCOc1> had surged above $117 a barrel on
worries of escalating unrest in oil-rich countries after the
United Nations approved military action to contain Libya's
Muammar Gaddafi. Brent crude for May delivery slipped 16
cents, or 0.1 percent to $114.74 a barrel after the
cease-fire. U.S. crude was little changed at $101.51.
The U.N. Security Council passed a resolution endorsing a
no-fly zone for Libya. It authorized "all necessary measures"
to protect civilians against Gaddafi's forces.
[]
The dollar climbed nearly 3 percent to 81.07 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 <> gained 110.72
points, or 0.94 percent, to 11,885.31. The Standard & Poor's
500 Index <.SPX> was up 9.67 points, or 0.76 percent, at
1,283.39 and the Nasdaq Composite Index <> was up 10.78
points, or 0.41 percent, at 2,646.82.
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-- G7 intervention
http://link.reuters.com/sub68r
-- Japan disaster
http://r.reuters.com/fyh58r
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Financial stocks rose after The Wall Street Journal
reported the largest U.S. banks will be notified Friday
whether they passed a second round of stress tests, allowing
them to raise their dividends. JPMorgan Chase & Co <JPM.N>
rose 1.4 percent to $45.17.
Industrial shares also rose, helped by renewed bets they
could benefit in Japan's rebuilding effort. General Electric
Co <GE.N> rose 1.4 percent to $19.48, while Caterpillar
<CAT.N> rose 1.9 percent to $105.10.
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. []
The euro <EURJPY=R> rose 3.5 percent to 114.61 yen, after
climbing 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.
The euro <EUR=> rose 0.8 percent against the dollar to
$1.4137, after earlier reaching a 4-1/2 month high of
$1.4052.
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 to 85.77 yen from 82.85 yen.
"It would need to be concerted and aggressive ... and even
then I'm skeptical," 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.
Demand for the safety of government debt eased. The drop
of 5/32 in the benchmark 10-year U.S. Treasury note's price
pushed itse yield up 0.02 percentage point to 3.28 percent.
Gold <XAU=> rose $17.25 to $1,419.60 an ounce, but was off
a record around $1,444 hit last week.
(Additional reporting by Anirban Nag, Joanne Frearson and
Chris Reese, Richard Leong, Edward Krudy, Chuck Mikolajczak
and Emelia Sithole-Matarise; Writing by Al Yoon; Editing by
Jan Paschal)
