* MSCI world index reclaims level before Japan disasters
* Portugal bailout likely after PM resigns, yields soar
* Sterling hits 2011 low vs currency basket
* Gold turns lower after hitting record high
(Updates prices, adds Nikkei futures)
By Rodrigo Campos
NEW YORK, March 24 (Reuters) - Global stocks rose for a
sixth consecutive session on Thursday, recouping the losses
after Japan's natural disasters, while the euro jumped on
optimism that European policymakers will be able to control a
political and debt crisis in Portugal.
Some investors, however, continued to seek out safety,
driving gold to a record high of $1,447.40 an ounce, before
turning negative as investors took profits. Worries mounted
about the ongoing violence in the Middle East and fears that
Portugal will, in fact, need a bailout.
Rising borrowing costs for Portugal and a downgrade of 30
Spanish banks' debt by rating agency Moody's had weighed on the
euro earlier. Spain's largest lenders were spared the rating
cut.
Oil prices wobbled as U.N.-mandated air strikes hit Libya
for a fifth night, but failed to stop Muammar Gaddafi's tanks
from shelling rebel-held towns. A report a French plane had
taken down a Libyan jet raised more worries of a long supply
outage.
In Syria, anger mounted as forces fired on protesters,
killing at least 37, forcing President Bashar al-Assad to
pledge greater freedoms.
The fall of the Portuguese government following the
resignation of its prime minister is expected to dominate a
summit of EU leaders on Thursday and Friday, with Lisbon under
intense pressure to seek a bailout package.
"The Portugal story was pretty much priced in," said
Samarjit Shankar, managing director of global FX strategy at
BNY Mellon in Boston. "Given the rapid events in Portugal and
the fall of the government, there might be something that comes
out of the summit today and tomorrow."
STOCKS BET ON ECONOMIC RECOVERY
Equity markets gained on bets on a continued economic
recovery that were coupled with the end of an upbeat quarter.
Light volumes, however, have lately underscored caution.
"There have been a few good earnings reports that have
given investors a bit more confidence that earnings are likely
to hold," said Bruce Zaro, chief technical strategist at Delta
Global Asset Management in Boston
"The story will continue that the rally has been built on
strong earnings momentum."
The Dow Jones industrial average <> gained 80.34
points, or 0.66 percent, to 12,166.36. The Standard & Poor's
500 <.SPX> rose 10.98 points, or 0.85 percent, to 1,308.52. The
Nasdaq Composite <> added 35.02 points, or 1.30 percent,
to 2,733.32.
The MSCI All-Country index <.MIWD00000PUS> climbed 0.9
percent, rising for six successive trading days for a gain of
4.8 percent.
In Europe shares rose to a two-week closing high, with the
FTSEurofirst 300 <> gaining 1 percent, led by gains in
two major British retailers.
U.S. dollar-denominated Nikkei futures <NKc1> rose more
than 1 percent to trade above the key 9,500 level, pointing to
a rebound in Tokyo after a 0.15 percent dip on the Nikkei
<> Thursday.
Surveys showed economic recovery continued in March,
shrugging off Japan's disaster, although turmoil in the Middle
East is pushing prices higher. []
The global economic recovery will continue through the rest
of the year despite the recent unrest in the Middle East and
the disaster in Japan, Barclays Capital said in a note, but
signs of higher inflation and an increased probability of
policy tightening called for caution. [].
"We are recommending that investors shift to a more
cautious approach to markets than the risk-embracing positions
we have recommended since the recovery got under way two years
ago," said Larry Kantor, head of research at Barclays.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Reuters polls on world stock markets []
Q+A-What's next for Portugal? []
World econ growth, inflation http://r.reuters.com/bex68r
Euro zone PMI, earnings momentum http://r.reuters.com/qew68r
European sovereign debt crisis: http://r.reuters.com/hyb65p
Japan earthquake in graphics http://r.reuters.com/fyh58r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
The euro <EUR=EBS> was up 0.7 percent against the dollar at
$1.4181, after earlier falling to a low of $1.4053 on trading
platform EBS.
Sterling fell to its lowest this year against a basket of
currencies in the wake of weak UK retail sales data and a
warning by Moody's on risks to economic growth.
Trade-weighted sterling <=GBP> fell as low as 79.6, its
lowest since Dec. 31. Versus the greenback <GBP=D4> it traded
down 0.8 percent at $1.6106.
The yen was steady against the dollar at 80.95 yen <JPY=>,
although market players are still wary Japan may intervene to
sell the currency if the dollar breaches 80 yen.
Spot gold <XAU=> dipped 0.4 percent to $1,430.50 an ounce
at 1912 GMT after investors took profits following bullion's
rise to a record high. Silver <XAG=> was little changed for the
day after earlier hitting a 31-year record of $38.13.
U.S. crude <CLc1> zigzagged throughout the session before
settling down 15 cents per barrel at $105.60 as investors took
profits after a recent rally on supply worries. Brent <LCOc1>
was little changed. []
(Reporting and writing by Rodrigo Campos; Additional reporting
by Tenzin Pema, Gene Ramos, Caroline Valetkevitch, Wanfeng Zhou
and Jessica Mortimer; Editing by Leslie Adler)
