* Stocks turn negative on banks' falls; Hungary debt fears
* Euro hits new 4-yr low to euro; record low to Swiss franc
* Equities may find support from US jobs number
(Updates prices, adds quote)
By Sujata Rao
LONDON, June 4 (Reuters) - Fresh fears over European banks
and talk of a "Greek-style" debt crisis in Hungary pushed stock
markets into the red on Friday while the euro hit a new
four-year low to the dollar and a record low versus Swiss franc.
Markets had earlier been cautiously higher on expectation
that U.S. jobs data would show recovery is gathering pace in the
world's largest economy.
Analysts expect the data, due at 1230 GMT, to show the
highest U.S. jobs growth last month since 1983 at 513,000.
[], the fifth straight month of gains. Some expect
an ever bigger number.
But by 1200 GMT MSCI world stocks <.MIWD00000PUS> fell 0.6
percent. European stocks <> were down 0.6 percent. led by
the heavyweight banking sector which was hurt by concern over
the derivatives division of French Societe Generale.
Societe Generale, which declined to comment on market
rumours about losses in its derivatives division, fell 6.3
percent. BBVA <BBVA.MC> and Credit Agricole <CAGR.PA> fell 5 and
3.8 percent respectively.
Before the falls started, global equity markets and U.S.
Treasury yields had in the past week recovered nearly a quarter
of the losses incurred over the previous two months when the
European sovereign debt crisis triggered a scramble out of risk.
Investors were also spooked again by comments out of
Hungary, perceived as the weak link in eastern Europe due to
high debt ratios. A spokesman for the Prime Minister said a
leader of the newly-elected ruling party had not exaggerated
when he had said on Thursday Hungary may face a Greek-style debt
crisis.
That pushed the forint currency to a one-year low and hit
shares in European banks exposed to eastern Europe.
"There is fear coming back into the market," said Matthew
Brown, sales trader at ETX Capital in London. "There are
unsubstantiated rumours of a French bank having derivative
losses and there are also comments coming out of Hungary."
U.S. futures also reversed their early stronger opening.
S&P 500 futures <SPc1> fell 8.6 points. Dow Jones industrial
average futures <DJc1> sank 60 points and Nasdaq 100 futures
<NDc1> dropped 15.5 points.
The optimism over the U.S. jobs is also tempered by the fact
that two-thirds of the new jobs are likely to be temporary hires
for the U.S. government census.
And worries over euro zone growth and banks are likely to
continue acting as a check on gains.
"If the payrolls figure is good, it'll support stocks on
both sides of the Atlantic. But this could be short-lived in
Europe, where stimulus plans have not been enough to kick-start
growth," said Christian Jimenez, fund manager and president of
Diamant Bleu Gestion, in Paris.
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For a graphic showing changes in non-farm payrolls, click
http://r.reuters.com/dyr28k
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DOLLAR REMAINS IN FAVOUR
The euro plumbed a fresh four-year low against the dollar
after the French Prime Minister Francois Fillon said he was not
concerned by the euro's decline.
The euro <EUR=> fell around half a U.S. cent to $1.2048
according to Reuters data, its lowest level since April 2006.
The euro has lost 17 percent from early 2010 highs.
Against the Swiss franc the euro dropped to a lifetime low
as the Swiss central bank failed to step in to stem its
currency's strength.
The euro <EURCHF=> fell as low as 1.3865 francs <EURCHF=>
according to electronic trading platform EBS, its weakest since
the single currency's launch in 1999.
Fears about tougher funding conditions in Europe and the
impact of spartan fiscal policy on growth may keep a lid on the
nascent revival in risk taking and keep investors favouring the
greenback and U.S. Treasuries.
"The dollar continues to attract safe-haven buying on the
back of continued concern in the euro zone about sovereign debt
and credit market liquidity," said Michael Hewson, analyst at
CMC markets.
(Editing by Patrick Graham)
(sujata.rao@thomsonreuters.com; +44 207 542 6176; Reuters
Messaging: sujata.rao.reuters.com@reuters.net))
