* MSCI world equity index down 0.6 percent
* Dollar rises broadly after tensions in Korean peninsula
* Oil falls; euro down on Irish/euro zone jitters
By Natsuko Waki
LONDON, Nov 23 (Reuters) - World stocks fell on Tuesday
while the dollar rose across the board after tensions in the
Korean peninsula prompted investors to trim risky assets, and
the euro stayed under pressure as Ireland's debt crisis raged
on.
North Korea fired dozens of artillery shells at a South
Korean island, killing two soldiers and setting houses ablaze in
one of the heaviest attacks on its neighbour since the Korean
War ended in 1953. []
The incident soured sentiment in global financial markets
already rattled by concerns that a rescue package for Ireland
may not stop problems from spreading to other indebted euro zone
countries.
In Korea, stock futures and the won tumbled in a late
selloff and more downside was expected on Wednesday.
"Tension in the region has led to a knee-jerk reaction in
currencies and stocks," said Paul Robson, currency strategist at
RBS Global Banking.
"Focus will shift back to the euro and we believe euro zone
peripheral issues have some more time to run. Investors will go
after Portugal and then Spain after Ireland is done."
The MSCI world equity index <.MIWD00000PUS> and the Thomson
Reuters global stock index <.TRXFLDGLPU> both fell 0.6 percent.
The FTSEurofirst 300 index <> lost more than half a
percent while U.S. stock futures fell around 0.7 percent <SPc1>,
pointing to a weaker open on Wall Street.
In Korea, December KOSPI 200 index futures <KSc1> fell 2.4
percent while the dollar rose more than 4 percent against the
won in offshore trade before trimming gains <KRWNDFOR=>.
Emerging stocks <.MSCIEF> dropped 1.7 percent.
U.S. crude oil <CLc1> fell 0.5 percent to $81.27 a barrel.
IRISH JITTERS
Bund futures <FGBLc1> attracted in safe-haven demand to rise
40 ticks.
Irish and other peripheral government bond yield spreads
widened and the cost of insuring higher-yielding euro zone
sovereign debt against default rose as markets fretted over
whether Ireland's embattled government would be able to pass a
budget.
The Irish Prime Minister on Monday defied pressure to quit
ahead of the unveiling of an austerity plan later this week and
a 2011 budget on Dec. 7, but said he would then call an early
election. []
"Given that this political uncertainty puts at risk the
four-year budget plan, this is definitely not helping the market
to move on and look forward," said Michael Leister, strategist
at WestLB.
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Ireland requests international bailout []
Europe debt problems []
Euro zone debt struggle: http://r.reuters.com/hyb65p
Multimedia on euro zone crisis: http://r.reuters.com/hus75h
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Portugal and Spain are seen as the next weakest links and an
official from Portugal's main opposition party said it would
allow passage of the minority Socialist government's 2011 budget
in the final vote on Nov. 26. []
A Spanish tender showed the country's short-term cost of
borrowing almost doubling.
Canada's finance minister said on Monday he was pressing the
European Union to address the Portuguese debt crisis quickly,
although he fell short of saying the country would need a
bailout like Ireland. []
The dollar <.DXY> gained 0.3 percent against a basket of
major currencies while the euro lost half a percent to $1.3552
<EUR=>.
(Reporting by Natsuko Waki; Editing by John Stonestreet)
