* Portugal PM resigns as austerity measures rejected
* World stocks up for fifth session
* Miners lift European, U.S. shares
* Gold up on safety bet; U.S. oil at 2-1/2 year high
(Recasts with Portugal's prime minister resigning, updates
with U.S. markets' close and Nikkei futures)
By Rodrigo Campos
NEW YORK, March 23 (Reuters) - The euro sank on Wednesday
as Portugal's prime minister resigned after his government's
austerity measures were voted down in parliament, while gold
climbed near its record high on safe-haven bets.
U.S. crude oil futures <CLc1> ended at a 2-1/2 year high
above $105 a barrel as Palestinian rocket strikes on Israel
escalated Middle East geopolitical risks and gasoline
inventories posted the biggest seasonal decline on record.
Global stocks ticked higher for a fifth straight day,
lifted by mining companies' shares as the prices of both
precious and base metals climbed. Gold rose above $1,440 an
ounce at one point and came within reach of its record high.
The MSCI All-Country World Index <.MIWD00000PUS>, which
represents global equities, gained 0.1 percent. The index has
added nearly 4 percent in the past five sessions.
On Wall Street, stocks gained as mining shares tracked
metals prices higher, though volume was among the lowest so
far this year.
Silver hit its highest price since 1980 and gold advanced
as air strikes on Libya and renewed worries about the European
debt crisis increased investors' interest in precious metals,
deemed a good store of value in uncertain or volatile times.
U.S.-dollar denominated Nikkei futures <NKc1> were
little changed, pointing to a quiet start in Tokyo on Thursday
after a 1.7 percent drop on Wednesday.
NO LONGER A SOCRATIC QUESTION
Portuguese Prime Minister Jose Socrates submitted his
resignation to the president on Wednesday after parliament
earlier rejected his minority Socialist government's latest
austerity measures in a vote. For details see
[].
"This raises the likelihood that Portugal will require a
bailout, but the question is about how much the market has
already factored this in," said Brian Dolan, chief strategist
at Forex.com in Bedminster, New Jersey.
"I'd say it's been factored in to a significant degree,
given the run-up we've seen in Portuguese yields and CDS."
The Portuguese benchmark 10-year bond yield rose to 7.83
percent on Wednesday from Tuesday's 7.68 percent. Many
economists see borrowing costs above 7 percent as
unsustainable and say Portugal will have to resort to the
rescue mechanism.
An International Monetary Fund spokeswoman said earlier
that Portugal has not requested an IMF-backed loan program,
dismissing speculation Lisbon was in talks with the fund.
The euro hit a session low versus the U.S. dollar
following Socrates' resignation, although the slide is seen as
temporary, given the expectation for the European Central Bank
to raise interest rates next month.
"Expectations of the ECB raising rates favor the euro over
the U.S. dollar," said Thanos Papasavvas, head of currency
management at Investec Asset Management, which manages over
$10 billion in currency funds.
"We hold an overweight position in the euro and will be
looking to buy on any dips," he added.
The euro <EUR=EBS> fell through the previous day's session
low, dropping to $1.4075 on trading platform EBS.
ON WALL ST, IT'S A MATERIAL WORLD
U.S. stocks rose in much lower-than-average volume. The
materials sector index <.GSPM> was the S&P 500's top
performer, rising 1.4 percent as metals prices climbed.
Freeport-McMoRan Copper & Gold <FCX.N> shares jumped 5
percent to $54.88.
Coal mining shares, which have risen recently amid
uncertainty over the future of nuclear power after the crisis
in Japan, also climbed.
The Dow Jones industrial average <> rose 67.39 points,
or 0.56 percent, to 12,086.02. The Standard & Poor's 500
<.SPX> added 3.77 points, or 0.29 percent, to 1,297.54. The
Nasdaq Composite <> gained 14.43 points, or 0.54 percent,
to 2,698.30.
A plunge in sales of new U.S. single-family homes in
February to the lowest level since 1963 tempered gains in U.S.
stocks. The data from the U.S. Commerce Department suggested
the housing market's troubles were deepening. []
Earlier, the FTSEurofirst 300 <> closed up nearly
0.5 percent at 1,112.36 as a rise in mining shares more than
offset weaker bank stocks.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For graphics, see:
Record U.S. gasoline drawdowns http://r.reuters.com/fys68r
U.S. trading volume slowdown http://r.reuters.com/gyp68r
Japan earthquake in graphics http://r.reuters.com/fyh58r
U.S. crude futures chart: http://link.reuters.com/maq68r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Sterling fell 0.8 percent to $1.6238 <GBP=D4> after UK
Chancellor George Osborne released a lower growth projection
for the coming year and increased borrowing targets from
2011/12 to 2014/15. See []
An index of Egyptian stocks <.EGX100> tumbled 9 percent in
the first day of trading on the Cairo exchange since Jan. 27,
after closing due to the political turmoil that ousted Hosni
Mubarak last month.
BONDS FLAT, OIL AND GOLD JUMP
U.S. Treasuries were little changed as the possibility that
Japan might sell Treasuries to pay for repairing catastrophic
events offset a safe-haven bid due to turmoil in the Middle
East and North Africa. The benchmark 10-year U.S. Treasury
note<US10YT=RR> slipped 3/32 in price to yield 3.34 percent,
up from 3.33 percent late Tuesday.
U.S. crude oil futures for May delivery <CLc1> rose 78
cents to settle at $105.75 a barrel, the highest close since
September 2008, while Brent <LCOc1> dipped 15 cents to end at
$115.55.
"Yemen is a very hot topic now. It is not that important
to the oil market but unrest in the region gives enough
psychological support to prices," Andy Sommer, energy market
analyst with EGL, said.
Spot gold <XAU=> rose 0.7 percent to $1,437.45 an ounce
after hitting a session high of $1,440.90, near its recent
record of $1,444.40.
Silver <XAG=> gained 2.7 percent to $37.29 an ounce at
2025 GMT, just below the session high of $37.34 an ounce, from
$36.34 late in New York on Tuesday.
Copper <CMCU3> rose over 2 percent on expectations of a
supply deficit this year, while aluminum <CMAL3> rallied to
its highest since September 2008.
(Reporting and writing by Rodrigo Campos; Additional
reporting by Steven C. Johnson, Lesley Wroughton, Chris Reese,
Gene Ramos and Robert Gibbons; Editing by Jan Paschal)
