GLOBAL MARKETS-World shares rise, Portugal costs soar

                                

                                
 * MSCI world index reclaims level before Japan disasters
                                
 * Portugal bailout likely after PM resigns, yields soar
                                
 * Euro wobbles, then heads higher
                                
 * Oil eases, gold steady near record high
 (Updates to U.S. market open, changes quote, adds New York to
dateline)
                                
 By Rodrigo Campos and Amanda Cooper
                                
 NEW YORK/LONDON, March 24 (Reuters) - World stocks rose for
a sixth consecutive session on Thursday, recovering losses
stemming from Japan's natural disasters, while Portugal's
borrowing costs soared after its prime minister quit, making a
bailout ever more likely.
                                
 Portugal's crisis and a downgrade to most Spanish banks'
debt by rating agency Moody's knocked the euro, but it
recovered early losses on a divergence in the euro zone and
U.S. interest rate outlooks. [USD/]
                                
 Western warplanes hit Libya for a fifth night but have
failed to stop Muammar Gaddafi's tanks from shelling rebel-held
towns. [ID:nLDE72N006]
                                
 Stores in Tokyo were running out of bottled water after
radiation from a damaged nuclear complex briefly made tap water
unsafe for infants, while more nations curbed imports of
Japanese food. [ID:nL3E7EN3MI]
                                
 Equity markets were not affected, however, as bets on a
continued economic recovery were coupled with the end to an
upbeat quarter. Light volumes have lately underscored caution,
however.
                                
 "We are at the quarter end, and the fact that we've had a
good earnings season, continued expansion of the economy and
also relatively cheap valuation (in stocks) looking forward is
helping the market," said Peter Kenny, managing director at
Knight Equity Markets in New Jersey.
                                
 The Dow Jones industrial average <.DJI> gained 47.87
points, or 0.40 percent, to 12,133.89. The Standard & Poor's
500 Index <.SPX> added 3.62 points, or 0.28 percent, to
1,301.16. The Nasdaq Composite Index <.IXIC> rose 11.55 points,
or 0.43 percent, to 2,709.85.
                                
 After Moody's downgrade pressured bank stocks and the
overall market at the open, the FTSEurofirst 300 <.FTEU3>
recovered to rise 0.7 percent to hit two-week highs, led by
gains in two major British retailers.
                                
 Surveys on Thursday showed economic recovery continued in
March, shrugging off Japan's disaster, although Middle East
turmoil is pushing prices higher. [ID:nLDE72N0KH]
                                
 The MSCI All-Country index <.MIW0000PUS> was last up 0.4
percent, rising for six successive trading days for a gain of
more than 4 percent.
                                
 Brent crude oil <LCOc1> dropped 0.6 percent below $115 a
barrel on worries about Europe's debt woes but was still
supported by concern over instability in the Middle East. U.S.
crude <CLc1> edged lower but was still above $105 per barrel.
[O/R]
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
  Reuters polls on world stock markets        [ID:nLDE72K1HU]
  Q+A-What's next for Portugal?               [ID:nLDE72N00Q]
  European sovereign debt crisis: http://r.reuters.com/hyb65p
  Japan earthquake in graphics    http://r.reuters.com/fyh58r
  U.S. crude futures chart:    http://link.reuters.com/maq68r
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 EU IN DISARRAY
                                
 The premium investors demand to hold Portuguese debt rather
than benchmark German Bunds hit euro lifetime highs.
                                
 Prime Minister Socrates resigned and warned of grave
consequences for the country after parliament rejected his
government's latest austerity measures aimed at avoiding a
bailout. The resignation increased expectations Lisbon will
seek international aid and threw into disarray a European Union
summit expected to address the region's debt crisis.
[ID:nLDE72N0AM]
                                
 Much of the anxiety over the euro zone's debt problems had
been soothed by the prospect of a longer-term reinforcement of
the EU bailout fund being agreed to at the summit, but this has
now been delayed and a decision will likely come in June.
                                
 The euro <EUR=EBS> was last up 0.3 percent against the
dollar at $1.4123, having fallen earlier to a low of $1.4053 on
trading platform EBS.
                                
 Still, the road ahead may be hard for the single currency.
                                
 "We think that no agreement at the EU summit on the bailout
facilities should erode euro support further in the near term."
said Valentin Marinov, currency analyst at Citigroup.
                                
 The yen was steady against the dollar at 80.90 yen <JPY=>,
although market players are still wary Japan may intervene to
sell the currency if the dollar breaches 80 yen.
                                
 Spot gold <XAU=> rose 0.2 percent to $1,438.45 an ounce,
just shy of a record $1,444.40 set earlier in the month. Silver
gained 0.7 percent to $36.37.
 (Additional reporting by Angela Moon, Wanfeng Zhou, Kirsten
Donovan and Harpreet Bhal; Editing by Padraic Cassidy)