* Goldman fraud case rattles investors
* Stocks down, emerging markets lose 2 percent
* Wall Street set for losses
* Greek yield spread widens
* Yen rises as investors seek stability
By Jeremy Gaunt, European Investment Correspondent
LONDON, April 19 (Reuters) - Worries about the impact of
fraud charges against Goldman Sachs <GS.N> rattled stock markets
on Monday, sending investors in search of less speculative
currencies, which boosted government bonds.
Wall Street also look set to open lower.
The Goldman fears combined, in Europe, with concerns over
the economic impact of disruption of commerce due to the cloud
of Icelandic volcanic ash.
It has already cost the airline industry hundreds of
millions of dollars, left millions of passengers stranded, and
hit importers and exporters.
The travel disruption is also delaying talks on Greek debt,
pressuring its sovereign debt and sending the spread against
German bunds to a lifetime high.
The U.S. Securities and Exchange Commission on Friday
charged Goldman with fraud over its handling of a debt product
tied to subprime mortgages. []
The result was a wave of risk aversion across financial
markets. Some analysts also have been suggesting that equities
in particular are due for a pause after world stocks hit a new
year high last week.
"The sell-off is not entirely surprising considering the
strong performance for risky assets in March and the first weeks
of April," SEB said in a note.
MSCI's all-country world index <.MIWD00000PUS> was down
nearly 1 percent, with its more volatile emerging market
component <.MSCIEF> off more than 2 percent.
The latter was on track for its biggest one day fall since
Feb. 5.
In Europe, where the airline industry has ground to a halt
as a result of the volcanic ash cloud from Iceland, the
pan-European FTSEurofirst 300 <> was down 1 percent.
Earlier, in Japan, the Nikkei <> closed down 1.74
percent. Market players said the Nikkei was ripe for
profit-taking after surging to an 18-month peak earlier this
month, in a rally that spurred worries the market may have risen
too far, too fast.
YEN RISES
The low-yielding yen rose broadly in a move that reflect
concerns among investors.
"People are buying yen on the back of increasing risk
aversion. It's risk-off on the Goldman news and worries over
this week's EU/IMF meeting on Greece. That's also hitting the
euro," said Michael Hewson, analyst at CMC markets.
Talks between the EU and IMF, expected to start on Monday,
have been delayed to later in the week due to the ash cloud.
[]
The euro was trading down against both the dollar and the
yen. Against the yen, it was down 0.9 percent at 123.40 yen
<EURJPY=R> after shedding around 1.5 percent on Friday after the
Goldman news. Against the dollar, it was down half a percent to
$1.3425 <EUR=>.
On fixed income markets, euro zone government bond yields
fell.
The premium investors demand to buy Greek government bonds
rather than German benchmarks rose to record levels as
uncertainty over the implementation of an aid package for
debt-stricken Athens unsettled investors.
(Additional reporting by Neal Armstrong, editing by Mike
Peacock and Neil Stempleman)
