* Oil jumps after Western forces strike Libya again
* Some progress seen at Japan nuclear plants, lifts stocks
* Deutsche Telekom soars on proposed U.S. deal
* Yen steady after intervention, more G7 action expected
(Adds U.S. stock futures, fresh quotes, updates prices)
By Mike Peacock
LONDON, March 21 (Reuters) - Oil prices rose $2 a barrel on
Monday after Western forces launched a second wave of air
strikes on Libya, while in other markets glimmers of hope about
Japan's nuclear crisis shaped sentiment.
The yen extended losses, with speculators wary of more
coordinated action by the Group of Seven countries after their
first joint intervention in over a decade last week. []
Brent crude for May <LCOc1> was up $2.02 at $115.95 a barrel
by 1115 GMT, while U.S. crude for April <CLc1> gained $1.91 to
$102.98 after the U.N.-mandated attacks on Libya to protect
civilians caught up in a one-month-old revolt against Muammar
Gaddafi's forces. []
For stock and bond markets, hopes of progress in averting a
nuclear calamity in Japan was the driving force.
Engineers rigged power cables to all six reactors at the
Fukushima complex and started a water pump at one of them to
reverse the overheating that has triggered the world's worst
nuclear crisis in 25 years. []
The pan-European FTSEurofirst 300 <> index of top
shares was up 1.6 percent at 1115 GMT, with Deutsche Telekom AG
<DTEGn.DE> catapulting 13 percent higher after AT&T Inc <T.N>
said it planned to buy its T-Mobile USA business.
That helped boost the MSCI world share index <.MIWD00000PUS>
0.7 percent, taking it back into positive territory for the year
to date.
"The market hates uncertainty and the issues in Japan are
easing which is helping," Colin McLean, managing director at
fund group SVM Asset Management in Edinburgh, which has 700
million euros assets under management.
U.S. stock index futures pointed to a strong open on Wall
Street, with futures for the S&P 500 <SPc1> up 1.2 percent and
Dow Jones <DJc1> futures up 1 percent <NDc1>. []
The VDAX-NEW volatility index <.V1XI>, Europe's main
investor fear gauge, dropped 8 percent as the proposed Deutsche
Telekom deal eclipsed concerns about Western intervention in
Libya.
Safe haven German government bond and U.S. Treasury futures
also fell. []
"Japan has been definitely considered by the market to be
the more important issue," one bond trader said.
Nonetheless, oil traders will remain on edge after unrest
also flared in Syria and Yemen in the wake of popular uprisings
that toppled long-time leaders in Tunisia and Egypt earlier this
year and a crackdown on protests in Bahrain last week.
Oil has risen more than a fifth this quarter and the social
unrest in North Africa and the oil-producing Gulf provide enough
uncertainty to keep prices buoyed.
"The key is really how Saudi and Iran play out. Cool heads
need to prevail. It's contained at the moment, but if things
worsen, you see a Mideast premium very quickly," said Jonathan
Barratt, managing director of Commodity Broking Services.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Libya Graphics http://link.reuters.com/neg68r
Japan disaster in figures http://r.reuters.com/ser58r
Japan disaster Top News page []
Picture, graphic packages: http://r.reuters.com/wyb58r
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YEN SLIDES
The dollar rose 0.8 percent from late U.S. trade on Friday
to 81.27 yen <JPY=>, after joint G7 intervention last week
hoisted the greenback nearly 4 percent versus the Japanese
currency.
The G7 acted after the yen jumped to a post-World War Two
record high of 76.25 yen to the dollar last Thursday. More is
expected to come if it climbs again.
"Dollar/yen will be supported in the near term with the
market wary of more intervention," said Hans-Guenter Redeker,
chief fx strategist at BNP Paribas.
"The central banks have drawn a line in the sand and it has
made a psychological impact on the markets which are unlikely to
take dollar/yen down to 76.25 yen again in the short term."
Japan's benchmark Nikkei share average <> plunged 10
percent last week as engineers battled to prevent a meltdown and
radiation leak at a nuclear power plant crippled by an
earthquake and tsunami that devastated a swathe of the country.
Japan's markets were closed for a holiday on Monday but the
MSCI index of Asian stocks outside of Japan <.MIAPJ0000PUS> rose
about 1.4 percent.
* For Reuters Global Investing Blog, click on
http://blogs.reuters.com/globalinvesting
* For the MacroScope Blog, click on
http://blogs.reuters.com/macroscope
* For Hedge Fund Blog, click on
http://blogs.reuters.com/hedgehub
(Additional reporting by Ian Chua, Joanne Frearson, Blaise
Robinson, Alejandro Barbajosa and Anirban Nag; Editing by Ron
Askew)
