* MSCI world equity index down 0.6 pct at 334.94
* Japan, euro shares fall: EM up on rebuilding demand hopes
* U.S. crude oil below $100/bbl; euro higher after EU
By Natsuko Waki and Jeremy Gaunt
LONDON, March 14 (Reuters) - World stocks fell to a six-week
low on Monday, driven by a 7.5 percent fall in Japanese stocks,
while oil tumbled as concerns grew about the economic damage
from Japan's earthquake and tsunami.
In emerging markets, construction and refinery shares rose
thanks to expectations for large-scale reconstruction efforts in
the economy hit by a triple blow of earthquake, tsunami and
nuclear emergency -- Japan's biggest crisis since World War Two
[]
The yen briefly fell after the Bank of Japan offered to pump
a record 15 trillion yen in fund injections into the banking
system to keep money markets stable []. The
currency later erased its losses.
Japanese stocks posted their biggest daily decline since
October 2008 in trading which saw record-high trading volume
among the Tokyo Stock Exchange's biggest companies. Rolling
blackouts started in the greater Tokyo area on Monday,
paralysing factories, buildings and households.
"Japan is going to be a focus and it is not going to be a
good day... There are not enough positive reasons out there to
buy," Matt Brown, trader at Catalyst Markets said.
"There are further worries about aftershocks and tsunamis
and the possible costs to businesses. There are fears how these
nuclear reactors can cope and any negative news will certainly
weigh on the market."
The MSCI world equity index <.MIWD00000PUS> fell 0.6 percent
to levels last seen in late January. The index has erased almost
all gains for the year, standing up 1.1 percent since January.
The Thomson Reuters global stock index <.TRXFLDGLPU> fell
0.9 percent.
The FTSEurofirst 300 index <> also fell 0.9 percent.
The benchmark Nikkei index <> fell 6.2 percent, having
hit a four-month intraday low at one point. The broader TOPIX
index <> closed down 7.5 percent, the largest daily decline
since October 2008 in the wake of the Lehman Brothers failure.
In the cash market, a record 4.88 billion shares changed
hands <.TV.T> on the Tokyo Stock Exchange's first section.
Emerging stocks <.MSCIEF> rose 0.4 percent.
"However, the downside for the overall stock market would be
limited. Demand for oil refining, steel and cement issues will
rise due to rebuilding after the quake," said Yu Rayming, chief
investor officer of Prudential Financial.
U.S. crude oil <CLc1> fell 2.3 percent to $98.83 a barrel as
concerns grew about a short-term hit to demand in Japan, the
world's third-largest oil consumer.
The Bund futures <FGBLc1> were steady.
The Japanese government bond yield curve steepened, with
super-long debt <JP20YTN=JBTC> <JP30YTN=JBTC> retreating as
market players anticipated the potential fiscal costs of future
rebuilding efforts.
The dollar <.DXY> fell 0.1 percent against a basket of major
currencies while the yen rose 0.1 percent to 81.81 per dollar
<JPY=>.
The euro was up slightly on the day at $1.3927 <EUR=> after
European Union policymakers surprised markets over the weekend
by reaching some significant agreements ahead of the March 24-25
heads of state meeting.
Essentially, the summit agreed to increase the lending
capacity of the European Financial Stability Fund to its full
limit of 440 billion euros and also lowered the interest rate
charges for EFSF loans. []
The cost of insuring Greek debt against default fell by 60
bps to 985 bps, according to data monitor Markit. Other
peripheral credit default swaps also fell, with the exception of
Irish CDS.
