GLOBAL MARKETS-Stocks rise despite slumping German GDP

                                
 * World stocks up but heading for week fall
                                
 * Europe stocks gain 0.5 percent, Japan 1.88 percent
                                
 * German GDP slump hits euro, boosts bonds
                                
 
                                
 By Jeremy Gaunt, European Investment Correspondent
                                
 LONDON, May 15 (Reuters) - World equities rose on Friday yet
still looked set to end the week down for the first time in 10
weeks, while poor economic data from German hit the euro and
boosted bonds.
                                
  MSCI's all-country world stock index <.MIWD00000PUS> was up
0.6 percent but remained around 2.9 percent in the red for the
week.
                                
 Europe's FTSEurofirst 300 <.FTEU3> was up 0.5 percent and
Japan's Nikkei <.N225> earlier closed 1.88 percent higher.
                                
 Equity markets have generally been lower this week as
investors have been hit by poor economic data, including
Friday's news that Germany's economy sank 3.8 percent in the
first quarter while France's dipped 1.2 percent.
                                
 "Fear and greed (have) a huge part to play right now with
everyone desperate to call the bottom of the market but
absolutely terrified that these so-called green shoots will
quickly turn into dead weeds," said Andrew Turnbull, senior
sales manager at ODL Securities.
                                
 Despite the week's losses, however, trackers of investment
flows reported no let-up in the shift to riskier assets.
                                
 EPFR Global said that in the week to May 13, investors had
pumped a net $3.5 billion into emerging market equities for a
total of $18.6 billion since the week ending March 11.
                                
 There were also flows into high-yield bond funds and
developed-market equity funds.
                                
 
                                
 GERMAN SLUMP
                                
 The yen rose broadly as much weaker-than-expected gross
domestic product data out of Germany and various eastern
European countries sparked renewed concerns about the depth of
the global economic recession.
                                
  This drove investors to buy currencies perceived to be
safer assets, with analysts saying the yen in particular is
still seen by speculators as the funding currency of choice,
helping it to a two-month high against the dollar.
                                
 The euro fell around 1 percent against the yen and also fell
against the dollar.
                                
 Ten-year Bund yields were down 3 basis points on the day at
3.279 percent <EU10YT=RR> while the two-year Schatz yield was 3
basis points lower at 1.267 percent <EU2YT=RR>.
                                
 "German GDP was a lot worse than expected, that's been the
driver," said a trader.
                                
(Additional reporting by Atul Prakash, Jessica Mortimer and
Emelia Sithole-Matarise; Editing by Victoria Main)
                                
 
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