(Correct year-to-date loss for FTSEurofirst to 6 percent)
* Euro up on Greek bailout hopes
* World stocks flat, held up by emerging markets
* European, Japanese shares lower
By Jeremy Gaunt, European Investment Correspondent
LONDON, Feb 9 (Reuters) - The euro rose on Tuesday on
speculation that European Union nations could bail out errant
member Greece, while global stocks were flat and emerging market
shares climbed.
Expectations about a rescue for Greece followed news that
European Central Bank President Jean-Claude Trichet was leaving
a meeting of central bankers in Sydney early to attend a
European Union leaders' summit. [ID:nSGE6170O9]
EU leaders will hold a special summit on the economy on
Thursday in Brussels amid increasing worries that Greece and
other so-called peripheral euro zone economies cannot handle
their debts and deficits.
Spreads between German 10-year bonds and Portuguese and
Spanish equivalents tightened. The spread with Greek debt
<GR10YT=RR> was steady, but wide at 365 basis points.
Concerns about the euro zone's sovereign debt troubles have
battered financial markets this year, even pressuring U.S. banks
on Wall Street on Monday.
The euro was up half a percent at $1.3716 <EUR=> and
three-quarters of a percent at 122.83 yen <EURJPY=>.
"We are seeing a squeeze of some short euro positions which
were established at low levels as market speculation of a Greek
bailout is seen as positive in the near-term", said Antje
Praefcke, currency strategist at Commerzbank in Frankfurt.
The euro is down more than 4 percent against the dollar this
year and more than 7.5 percent against the yen, in part because
of concerns over debt.
The dollar was off a quarter of a percent against a basket
of major currencies <.DXY>.
MIXED STOCKS
World stocks as measured by MSCI <.MIWD00000PUS> were flat,
lifted by gains of 0.8 percent in their emerging market
component. Chinese and Hong Kong shares were generally higher,
cheered by higher commodity prices.
In Europe, the FTSEurofirst 300 <.FTEU3> was down 0.2
percent, taking year-to-date losses to around 6 percent.
The market has been hammered by a number of worries
following last year's large gains.
"Investors are rightly concerned about the timing of the
removal of extraordinary loose fiscal and monetary policy. The
risk of default has increased and there is an uncertainty over
financial regulation," said Henk Potts, equity strategist at
Barclays Wealth.
Earlier, Japan's Nikkei <.N225> edged down 0.2 percent to a
two-month closing low.
Toyota Motor Corp <7203.T>, whose shares have lost about a
fifth of their value since late January, rose on short-covering
with investors welcoming signs it was taking steps to deal with
its safety problems.
The automaker announced a recall of the Prius and other
hybrid cars for braking problems.
(Additional reporting by Atul Prakash and Neal Armstrong,
editing by Mike Peacock)