* Japan stocks in biggest decline since October 2008
* U.S., European shares fall on fears over global recovery
* Emerging market stocks up on rebuilding hopes
* U.S. crude dips to $100/bbl on Japan impact on demand
* Dollar rebounds against yen; gold ticks up
(Updates New York trading)
By Al Yoon
NEW YORK, March 14 (Reuters) - World stocks slid to
six-week lows on Monday as the devastating toll from Japan's
earthquake, tsunami and nuclear crisis continued to unfold,
raising fears of the impact on industries ranging from
insurance to power generation.
Oil prices fell on expectations of slower demand from
Japan, the world's third largest economy and a major oil
importer. Growing unrest in a Yemeni area bordering Saudi
Arabia, the world's largest oil exporter, limited the decline
in oil prices.
Japanese stocks posted their biggest daily decline since
October 2008 in record volume as traders considered economic
losses. The Nikkei index <> closed off 6.2 percent and the
broader TOPIX index <> slumped 7.5 percent.
The worst earthquake on record in Japan has triggered
worries that global growth would suffer a setback just as the
world economy is emerging from the effects of the financial
crisis. Japan's recovery costs could top $180 billion, or 3
percent of its annual economic output and more than 50 percent
higher than the costs of the 1995 earthquake in Kobe,
economists said.
"The earthquake could have great implications on the global
economic front," said Andre Bakhos, director of market
analytics at Lek Securities in New York. "If you shut down
Japan, there could be a global recession."
Japanese gross domestic product may slide by 1 trillion yen
in 2011, or about 0.2 percentage point, Hiromichi Shirakawa, a
Tokyo-based economist at Credit Suisse, said in a client note.
But deteriorating consumer confidence and production cuts could
worsen the GDP drop as much as 1 percentage point, he added.
Before the disaster, Shirakawa estimated Japan growth would
slow to 1.4 percent this fiscal year from 3 percent in 2010.
The U.S. dollar rebounded from near-record lows against the
yen after the Bank of Japan announced a series of policy easing
measures to shore up the economy.
Gold rose, recovering some of last week's losses, as the
Japanese quake and heightened political unrest in the Middle
East and North Africa drove safe-haven buying, driving prices
toward recent record highs.
The MSCI world equity index <.MIWD00000PUS> fell in North
American trading, trading down 0.92 percent to levels last seen
in late January. It is down more than 4 percent from its
February peak. The Thomson Reuters global stock index
<.TRXFLDGLPU> shed 1.1 percent.
Emerging market equities were lifted by construction and
refinery shares on expectations of large-scale reconstruction
efforts in Japan as the country confronted what officials there
called its biggest crisis since World War Two. For details see
[]
The pan-European FTSEurofirst 300 index <> dropped
1.2 percent, while emerging markets stocks <.MSCIEF> rose 0.8
percent.
The Dow Jones industrial average <> dropped 97.79
points, or 0.81 percent, to 11,946.61. The Standard & Poor's
500 Index <.SPX> declined 12.81 points, or 0.98 percent, to
1,291.47 and the Nasdaq Composite Index <> fell 21.64
points, or 0.8 percent, to 2,693.97.
Among shares most affected were those in the nuclear
industry after explosions and damage at Japanese nuclear plants
created doubts about the prospects of the industry. A second
hydrogen explosion rocked a stricken nuclear power plant in
Japan, sending authorities scrambling to avert a meltdown.
General Electric Co <GE.N> which has combined nuclear
ventures with Hitachi Ltd <6501.T>, fell 3 percent to $19.75.
Shares of luxury goods companies worldwide were also hit on
worries about a drop in retail demand from Japan, which
accounts for 11 percent of global luxury sales. Japan accounts
for about 19 percent of sales for Hermes <HRMS.PA>, 9 percent
for LVMH <LVMH.PA>, 16 percent for PPR's <PRTP.PA> Luxury
Business Group, which owns Gucci and Yves Saint Laurent.
Tiffany <TIF.N> shares fell 5 percent and Coach <COH.N>
declined 5.6 percent. In Europe, LVMH slipped 3.1 percent,
Hermes 3.1 percent, Richemont <CFR.VX> 2 percent, and PPR, 2.5
percent.
The iShares MSCI Japan index exchange-traded fund <EWJ.P>
tumbled 7.9 percent, and the Global X Uranium ETF <URA.P>
dropped more than 18 percent
Brent crude <LCOc1> edged down 0.2 percent to $113.66 a
barrel, while U.S. crude oil <CLc1> was little changed at
$101.18, pressured by expectations that oil demand in in
Japan, the world's third-largest oil consumer, would fall as
economic activity stalls following the quake. Conflicts in
Libya and Yemen continued to be eyed by traders.
The dollar index <.DXY>, a gauge of the greenback against a
basket of currencies, fell 0.56 percent. The euro was up 0.6
percent at $1.3990 <EUR=> after European Union policymakers
surprised markets over the weekend by reaching significant
agreements ahead of the March 24-25 heads of state meeting.
The Japanese yen declined 0.24 percent against the dollar
to 81.69 yen. The dollar rebounded from a four-month low
against the yen as the Bank of Japan supplied banks with record
funds to stabilize the stricken economy.
Most U.S. Treasury debt prices rose on Monday as investors
looked for lower-risk assets while trying to gauge the eventual
impact of the Japanese disaster and watching political turmoil
in the Middle East and North Africa. Benchmark 10-year U.S.
Treasury yields fell 0.04 percentage point to 3.36 percent.
Spot gold prices rose $8, or 0.56 percent, to $1,425 an
ounce.
(Additional reporting by Edward Krudy, Steven C. Johnson,
Robert Gibbons and Phil Wahba in New York and Japanese markets
reporters; Editing by Leslie Adler)
