* Stocks recover some poise after the week's sharp falls
* Investors move out of yen, gold, bonds
* Gains and losses only fraction of what seen earlier in
week
By Jeremy Gaunt, European Investment Correspondent
LONDON, Oct 9 (Reuters) - Many stock markets rose strongly
on Thursday and winners during the recent turmoil, such as the
yen and gold, slipped as at least temporary calm returned to
markets a day after coordinated global interest rate cuts.
European shares <> were 1.9 percent higher. Emerging
market shares as measured by MSCI <.MSCIEF> were up 3.1 percent.
Demand for government bonds, gold <XAU=> and low-yielding
currencies -- all recent beneficiaries of investors searching
for relative safety -- fell.
The direction of the moves was the mirror of what happened
on Wednesday and earlier in the week, but nowhere near matched
the degree.
MSCI's main world stock index <.MIWD00000PUS>, for example,
was up 1.1 percent. But it lost 3.9 percent on Wednesday, 3.0
percent on Tuesday and 6.1 percent on Monday.
Thursday's relative calm followed an unprecedented display
of international coordination on Wednesday when the U.S. Federal
Reserve and central banks from Europe, Canada and China executed
emergency rate cuts in the face of plunging global equity
markets and the worst financial crisis in some 80 years.
"Markets are not turning positive, they are recovering from
heavy losses that we saw earlier this week. The sentiment has
not really improved," said Rik Zwaneveld, trader at AFS Brokers,
in Amsterdam.
"The rate cuts are a good step in the right direction to
stop the bleeding, but this won't be enough."
Echoing this, Japan's Nikkei <> closed down, finishing
0.5 percent lower in a choppy session and down for a sixth
straight day for its lowest close since June 2003.
Wall Street also closed lower overnight, although early
indications from stocks index futures suggested there would be
gains on Thursday.
STRESS BUSTING
Against this background, governments and financial
authorities were continuing to intervene.
The Bank of Japan made its biggest same-day money market
injection since the global credit crisis blew up, supplying a
total of four trillion yen ($40 billion).
Australia's central bank also lent $10 billion in its U.S.
dollar repurchase auction. South Korea, Hong Kong and Taiwan cut
interest rates.
Late on Wednesday, meanwhile, the European Central Bank said
it would halve the premium banks pay for emergency borrowing
over its main refinancing rate.
Analysts at Barclays reckoned the additional ECB measures in
practise added almost a further 75 basis points in cuts on top
of the official 50 basis point rate cut made earlier.
The various moves over the past few days were having little
effect on money markets -- the heart of the crisis because of a
freezing up of lending.
Three-month dollar interbank rates were quoted at 6.44/6.80
percent on the Reuters system <USD3MD=> compared with market
expectations the Fed funds rate will be around 1.25 percent by
January compared with the new level of 1.50 percent.
There was also some wariness about the restoration of U.S.
shareholders' rights to sell short after a nearly three week
ban.
BACK FROM THE BRINK
Steadying stock markets weakened demand for relatively safer
assets.
Spot gold was down 2.2 percent at $886 an ounce having
gained around 8.5 percent in the week to late Wednesday.
Japan's yen fell. The dollar rose 1.6 percent from late U.S.
trade to 100.805yen <JPY=>, rebounding from a six-month low of
98.60 yen hit on trading platform EBS on Wednesday.
The euro also recovered against the yen, up 2.5 percent at
138.61 yen <EURJPY=R>, after falling to a three-year low of
134.15 yen on Wednesday.
"At least some kind of confidence has come back to the
market and is supporting high-yielders and putting pressure on
the yen, said Antje Praefcke, currency strategist at
Commerzbank.
Euro zone government bond prices also fell.
Two-year Schatz yields <EU2YT=RR> were up 7 basis points at
3.141 percent, while 10-year Bund yielded <EU10YT=RR> 3.926
percent, up 12 basis points.
(Additional reporting by Jessica Mortimer and Blaise Robinson,
editing by Chris Pizzey)
