* Growing tensions in Egypt lifts oil
* World stocks fall for third straight day
By Dominic Lau
LONDON, Feb 11 (Reuters) - World stocks fell for the third
straight day on Friday partly on growing tensions in Egypt after
President Hosni Mubarak disappointed protesters hoping he would
resign, though oil and the dollar advanced.
Partly because of the Egypt crisis, Asian stocks were on the
course for their biggest weekly loss in nine months, but
European shares were more resilient, on track for a second
straight week of gains, and safe-haven Swiss francs fell against
the dollar after Swiss consumer price inflation eased slightly.
Egypt's people-power protesters, reeling with disillusion
and anger, planned massive new demonstrations on Friday that may
test the army's loyalties. []
"Everyone had hoped the situation in Egypt was going to go
smoothly, but the chances of this are small," Koen De Leus,
strategist at KBC Securities Bolero in Brussels, said.
"There is going to be nervousness in the market and there
are worries of possible contagion in other Middle Eastern
countries."
World stocks measured by MSCI All-Country World Index
<.MIWD00000PUS> slipped 0.3 percent, down for the third day in a
row partly hit by disappointment with corporate earnings. The
index, however, is still up 2.8 percent so far this year.
The MSCI emerging market index <.MSCIEF> dropped 0.6
percent, and is down 5.9 percent since the beginning of the year
as some investors shift out of the booming emerging markets on
concerns over inflation and bet on improving growth in the
United States.
MSCI's index of Asia Pacific shares-ex-Japan <.MIAPJ0000PUS>
fell more than 4 percent this week, set for its worst
performance since May 2010.
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Graphic on asset returns in 2011: http://r.reuters.com/suc97r
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OIL HIGHER
Worries that rising tensions in Egypt could spread disorder
to other countries in the oil-rich region sent U.S. crude
futures <CLc1> up 1 percent to above $87 a barrel and ICE Brent
crude <LCOc1> up 0.8 percent to $101.67 per barrel.
"Yesterday, there were the ups and downs of hopes that the
situation in Egypt was going to be resolved, but that did not
happen," said David Cohen, economist at Action Economics in
Singapore.
"So, there's still a degree of uncertainty hanging. The
politics in Cairo remains a source of pressure on oil prices."
Higher oil prices would put further pressure on the
inflationary situation in emerging economies, threatening to
hamper global growth and exaggerate the shift of funds out of
emerging markets to developed countries.
The 18th day of unrest in Egypt also helped the dollar
<.DXY>, which was up 0.3 percent against a basket of currencies.
The U.S. currency was up 0.1 percent at 0.9712 francs <CHF=>.
Yields on 10-year U.S. Treasuries <US10YT=RR> fell 3 basis
points to 3.6683 percent.
Egypt five-year credit default swaps rose 39 basis points to
380 bps, CDS monitor Markit said.
In Europe, the FTSEurofirst 300 <> index eased 0.1
percent, though it is still up 4.2 percent this year, and
Portugal's stocks <> rose 0.2 percent as the country's
bond yields stabilised after rising to 7.656 percent on
Thursday, topping the previous record set in November.
Ten-year Portuguese debt <PT10YT=TWEB> yield was little
changed on the day at 7.344 percent, steady relative to euro
zone benchmark German Bunds <DE10YT=TWEB>.
The euro <EUR=> fell 0.4 percent to $1.3538.
(Additional reporting by Joanne Frearson, Anirban Nag and
William James in London and Seng Li Peng in Singapore; Editing
by Toby Chopra)
