(Corrects to remove reference to Nikkei as market closed for
holiday)
* Stocks rise, with MSCI world index up 0.5 pct
* Dollar gains against major currencies
* Oil, gold and govt bonds fall
(For a FACTBOX on major market losses and gains in 2008, click
on [])
By Dominic Lau
LONDON, Jan 2 (Reuters) - World stocks rose on the first
trading day of the year after a dismal 2008, while the dollar
gained. Crude oil and metal prices fell, as did government
bonds.
Global stocks as measured by the MSCI world index
<.MIWD00000PUS> were up 0.5 percent, with the pan-European
FTSEurofirst 300 <> gaining 1.1 percent.
"The unprecedented events of 2008, and continuing fallout
into 2009 will see a number of false dawns and continuing
volatility throughout the coming year," said a trader at
derivatives broker Blue Index in London.
Data still painted a bleak picture for the global economy
after factories in China, India and Russia slashed output and
jobs at a record pace in December.
Manufacturing activity in the euro zone also sank to a
record survey low last month, below an already dire flash
reading and the outlook remains grim as new orders also sagged
to new lows.
The downturn in activity was accompanied by falling
inflationary pressures, clearing the way for the European
Central Bank to cut interest rates again when it meets later
this month, as it is expected to do.
"The good news about this year is that people have been so
pessimistic at the beginning of this year as opposed to being so
optimistic at the beginning of last year, they may have overdone
the pessimism," said Justin Urquhart Stewart, London-based
investment director at Seven Investment Management.
"And that's quite sensible because there are some huge
challenges to face. The thing people should remember is that
equity markets generally recover in a recession but it's like
trying to fight your way through the dust after the explosion's
gone off."
The euro <EUR=> fell 0.3 percent to $1.395 and the yen
<JPY=> also slipped against the dollar, which last year posted
its firstly year gain against a basket of currencies since 2005.
As global demand weakened, oil prices <CLc1> remained in the
doldrums after reaching their peak of $147 a barrel in July.
Crude traded at around $41 a barrel, down more than 7 percent.
Gold <XAU=> also gave up gains, having started on a firm
note in early trade, as the dollar bounced from lows, but
expectations of more grim U.S. economic data could still ignite
safe-haven buying from investors.
Prices in relatively risk-free government bonds also
slipped. Yields in benchmark 10-year U.S. Treasuries <US10YT=RR>
ticked up 1 basis point, while 10-year Bund yields <EU10YT=RR>
were 7.3 basis points higher at 3.022 percent.
Euro zone government bonds had a stellar year in 2008 with
two-year yields <EU2YT=RR> falling around 50 percent and 10-year
yields by a third as the market rallied due to the credit crunch
and resulting economic downturn.
(Additional reporting by Jon Hopkins and Atul Prakash in
London)
