* European stocks recover on spending hopes
* MSCI's world equity index down 16% this week so far
* Italian govt debt hit again as death toll passes 1,000
* European shares steady on stimulus hopes
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
(Rewrites top, adds quote, updates prices)
By Abhinav Ramnarayan
LONDON, March 13 (Reuters) - World stocks bounced off their
lows on Friday on hopes of more central bank stimulus and
government spending, but were still set for their worst week
since the 2008 financial crisis, with coronavirus panic-selling
hitting nearly every asset class.
European stock markets rose on hopes of a coordinated
stimulus package from world governments after several sessions
of sustained, heavy losses on expectations of a global recession
that could be prolonged.
U.S. stock futures also pointed to a higher open, with
Nasdaq futures ESc1 up 5%. .N
Italy and Spain meanwhile imposed trading curbs, banning
short-selling of dozens of stocks, to stem a market rout
triggered by the coronavirus outbreak that saw European stock
exchanges post their worst-ever losses on Thursday. But the MSCI world equity index .MIWD00000PUS , which
tracks shares in 49 countries, hit a three-year low in Asian
hours and is down nearly 16% this week so far -- its worst run
since October 2008 when Lehman Brothers' collapse triggered the
global crisis.
"Markets are quite prepared for a period of falling output.
The real fear is that you get second-round effects that result
in a nastier, longer recession in the global economy," said
Investec economist Philip Shaw.
"That is going to be very difficult to escape from given the
monetary pedal is very close to the floor in many
jurisdictions."
MSCI's main European index .MSER was up 6.5% by 1145 GMT,
after having fallen more than 20% over the previous four
sessions.
Earlier, Japan's Nikkei .N225 fell 10% before paring
losses to close 6% lower. Australia's S&P/ASX200 .AXJO had its
wildest trading day on record, falling past 8% before surging in
the last minutes of trade to settle 4.4% higher at the close.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS wobbled 0.1% higher by late afternoon after
falling more than 5% in morning trade.
The recovery came as central banks from the United States to
Australia pumped liquidity into their financial systems and as
hopes grew that U.S. Democrats and Republicans could pass a
stimulus package on Friday. RECOVERY
Intervention from three of Europe's senior policymakers
helped staunch the bleeding in Italian government bonds, which
had seen the benchmark 10-year yield leap by 55 bps on Thursday
-- its worst day since November 2011. IT10YT=RR
On Friday, the 10-year yield -- which moves inversely to
price -- had risen another 20 basis points in early trade, but
dropped back again after Italian central bank chief Ignazio
Visco said the ECB can front-load bond purchases if needed.
The ECB unveiled fresh stimulus measures but kept interest
rates steady on Thursday while its chief Christine Lagarde
seemed to put the onus firmly on governments to tackle the
coronavirus crisis, sending markets into a tailspin.
"Lagarde has no experience with markets and that became
obvious yesterday," said Christoph Rieger, head of rates and
credit research at Commerzbank.
Italy is one of the worst-hit countries in Europe from the
spread of coronavirus, with the death toll shooting past 1,000
people and the government ordering blanket closures of
restaurants, bars and almost all shops. Oil LCOc1 steadied on Friday, after having dropped 7% on
Thursday on U.S. President Donald Trump's surprise travel ban
and on a flood of cheap supply coming into the market from Saudi
Arabia and the United Arab Emirates.
Major currencies stabilised after furious dollar buying
overnight, with the euro EUR= finding a footing around $1.1200
and the Aussie AUD=D3 recovering to $0.6300.
For Reuters Live Markets blog on European and UK stock
markets, please click on: LIVE/
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World stocks set for worst week since Oct 2008 https://tmsnrt.rs/2wPc5lV
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