GLOBAL MARKETS-Shares climb, investors hope for Greece progress

Ryan Vlastelica
Reuters Middle East

* Stocks earlier fell as lenders failed to agree on Greece

* Euro and U.S. dollar flat; Japanese yen rebounds

* Brent oil flat as Greece offsets on Gaza-Israel clashes

NEW YORK, Nov 21 (Reuters) - World shares advanced on

Wednesday as policymakers in Europe reassured markets that a

deal on releasing emergency aid to Greece was close, though the

failure of lenders to come to an agreement on their own kept

investors cautious.

Euro zone finance ministers, the International Monetary Fund

and the European Central Bank will gather again Monday, after

nearly 12 hours of talks overnight in Brussels failed to produce

a consensus on how to shrivel Greece's debts.

After the meeting ended, French Finance Minister Pierre

Moscovici said a deal was just "a whisker away," while European

paymaster Germany said a plan was being developed to provide

Greece with funding until 2016.

Shares in Europe rebounded from early losses. The

FTSEurofirst 300 index of top shares closed 0.3 percent

higher, while the Euro STOXX 50 recouped from an

earlier drop to add 0.5 percent.

"European exchanges themselves are doing okay, so investors

are saying 'we didn't really expect a resolution (on Greece),'

just kind of learning to live with it," said Peter Jankovskis,

co-chief investment officer at OakBrook Investments LLC in

Lisle, Illinois.

U.S. stocks gained in trading thinned by a national holiday

Thursday for Thanksgiving. The Dow Jones industrial average

was up 53.21 points, or 0.42 percent, at 12,841.72. The

Standard & Poor's 500 Index was up 3.27 points, or 0.24

percent, at 1,391.08. The Nasdaq Composite Index was up

9.56 points, or 0.33 percent, at 2,926.24.

Investors in the U.S. digested the latest data, including

weekly jobless claims that met expectations and a final read on

November consumer sentiment that was below forecasts.

Market participants remained anxious about tax and spending

changes - known as the fiscal cliff - poised to come into effect

in the new year, though policymakers are not expected to get

back to negotiations until after Thanksgiving.

The benchmark 10-year U.S. Treasury note was

down 6/32, with the yield at 1.6882 percent.

The euro rose 0.1 percent to $1.28, also rebounding

from earlier weakness of as much as 0.5 percent.

Prices for German debt, the safest in the euro zone, had

eased slightly, sending 10-year yields down modestly to 1.431


However, a sale of 3.25 billion euros ($4.2 billion) of new

German 10-year debt, which paid an interest rate of 1.5 percent,

drew solid demand from investors worried about the outlook.


Before the Greek impasse, world equity markets had come under

pressure Tuesday after Federal Reserve Chairman Ben Bernanke

warned that the central bank lacked the tools to cushion the

impact of a potential U.S. fiscal crisis.

Bernanke said worries over fiscal negotiations, aimed at

preventing a series of mandatory tax increases and spending cuts

early next year, had already damaged growth in the world's

largest economy.

His comments snapped a two-day rally on Wall Street Tuesday,

but the MSCI world equity index later rose 0.3


Asian shares had initially fallen Wednesday in reaction to

the Greek aid payment delay, but closed modestly higher, buoyed

by gains in mainland Chinese markets and in Tokyo.

MSCI's broadest index of Asia-Pacific shares outside Japan

gained 0.2 percent, while Japan's Nikkei stock

average closed up 0.9 percent at a two month-high.


The Nikkei's gains came as shares of exporters rose, after

the yen hit a seven-month low against the dollar, on

expectations a new government will aggressively push the Bank of

Japan to expand monetary stimulus.

Japan's opposition Liberal Democratic Party, tipped to win

next month's general election, also promised to boost spending

as it emerged that exports had fallen in annual terms for a

fifth straight month in October.

The yen rose 0.9 percent to the dollar, rebounding

from its weakest level since early April. The U.S. dollar

was off 0.1 against a basket of currencies, while Brent crude

erased earlier losses to trade flat at $109.91 per


Oil was flat, after earlier having been supported by

mounting tensions in the Middle East amid days of fighting

between Israel and Hamas, which many feared could disrupt oil

flows. Concerns about Greece and the impact that could have on

international growth, however, weighed on crude prices.

"There are opposing forces where the uncertainty in Europe

and the United States meets with the bullish uncertainty in the

Middle East ... so I think we're going to see a volatile

market," said Jeremy Friesen, commodity strategist at Societe

Generale in Hong Kong.

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