* World stocks rise for fourth day
* Nikkei rises 4.4 pct as markets return from holiday
* Expected ECB rate hike propels euro higher
* Investors eye Libya, Japan
(Updates prices, adds byline, New York to dateline)
By Rodrigo Campos and Pratima Desai
NEW YORK/LONDON, March 22 (Reuters) - A jump in Japanese
shares buoyed global equities on Tuesday while the U.S. dollar
tumbled to 15-month lows against the index of major currencies
and was expected to weaken further.
The benchmark Nikkei average <> jumped 4.4 percent as
traders in Tokyo returned from a national holiday to recoup
some of last week's losses of more than 10 percent.
The MSCI global stocks index <.MIWD00000PUS> was up 0.4
percent but the FTSEurofirst 300 <> index of top European
shares edged up less than 0.1 percent after surging 1.8 percent
in the previous session. []
The euro rose to its highest in four and a half months
against the U.S. dollar on expectations the European Central
Bank may raise interest rates to address inflation.
Uncertainty stemming from oil-producing northern Africa and
the Middle East, as well as concern about Japan's economy after
the natural disasters and nuclear crisis have kept investors on
edge in the past days.
U.S. stocks opened little changed though as a three day
rally appeared to run out of steam in light of global
uncertainty.
"There is a lot of volatility and a lot of uncertainties
surrounding Japan and Libya," said Tim Ghriskey, chief
investment officer at Solaris Asset Management in Bedford
Hills, New York.
"Neither one of the situations looks quite ready to settle
down yet and that could drag out for some time and weigh on the
market."
The Dow Jones industrial average <> was down 5.83
points, or 0.05 percent, at 12,030.70. The Standard & Poor's
500 <.SPX> dipped 1.79 points, or 0.14 percent, at 1,296.59.
The Nasdaq Composite <> fell 2.72 points, or 0.10 percent,
at 2,689.37.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Dollar index weekly trendline: http://r.reuters.com/jum68r
Japan current account: http://link.reuters.com/hac68r
Graphic on intervention: http://link.reuters.com/sub68r
Earthquake in graphics http://r.reuters.com/fyh58r
Yen stop-loss selling http://link.reuters.com/fac68r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
US DOLLAR TUMBLES
In currency markets the euro <EUR=> hit $1.4249 versus the
U.S. dollar, its highest since November, boosted by
expectations the European Central Bank will raise interest
rates next month, which prompted demand from longer-term "real
money" investors.
The dollar fell to a 15-month low against the
Intercontinental Exchange's index major currencies <.DXY>.
Sterling was the biggest gainer after a rise in UK inflation
increased the chances of an interest rate hike sooner rather
than later.
"Euro/dollar is supported after (ECB President Jean-Claude)
Trichet continued to signal a rate hike in April," said Mic
Ingenuus, currency strategist at Nordea in Copenhagen.
Oil prices ticked lower, with Brent trading below $115 on
an anticipated slowdown in Western air strikes on Libya
following three nights of bombings.
U.S. President Barack Obama, wary of getting sucked into a
Libyan civil war, said the United States will cede control of
the air assault in days. [] and [].
Brent crude for May <LCOc1> fell 36 cents to $114.60 as
disruptions from Libya are seen priced in. []
"Short-term, we suspect that the crude oil market is
somewhat overextended here, as the fighting in Libya will lose
its ability to spark the market higher," said Edward Meir,
senior commodities analyst at MF Global.
"For all practical purposes, investors have reconciled
themselves with the fact not much oil will be flowing out of
Libya any time soon."
(Additional reporting by Angela Moon, Jeremy Gaunt, Jessica
Mortimer, Rujun Shen, Joanne Frearson, Nia Williams and
Alejandro Barbajosa;)
