* Oil resumes climb after sliding the previous day
* Stocks under pressure on bank sector worries, bonds
steadier
* Dollar eases as oil rises
By Ian Chua
LONDON, June 20 (Reuters) - Oil prices edged up on Friday
after having suffered their biggest fall in three months in the
previous session, helping give energy stocks like BP <BP.L> a
bit of a boost.
But global equities and the dollar came under pressure on
worries about the financial sector after Citigroup <C.N> warned
that it could take substantial write-downs in the second
quarter, and following Moody's move to strip the insurance arms
of Ambac Financial Group <ABK.N> and MBIA Inc <MBI.N> of their
Aaa ratings. [] []
"I'd be happy to see a rebound in equities, but this is not
going to be easy," said Thierry Lacraz, strategist at Swiss bank
Pictet in Geneva.
"There is only one problem -- the banks, the banks, the
banks -- after Citigroup warning yesterday and the Moody's
rating cuts for Ambac and MBIA."
U.S. crude <CLc1> rose 91 cents to $132.84, steadying from a
near $5 fall on Thursday -- the biggest drop since March 19 --
after China announced a surprise increase of about 18 percent in
retail gasoline and diesel prices, effective Friday.
The move, likely to curb demand in the world's second
largest consumer, came just days before an emergency meeting on
Sunday in Saudi Arabia between consumers and producers to
discuss rising oil prices.
The steadier oil price helped energy stocks such as BP,
Shell <RDSa.L> and Total <TOTF.PA> stage a rebound from recent
declines, but weakness in bank stocks including UBS <UBSN.VX>
and Royal Bank of Scotland <RBS.L> weighed on the wider market.
The FTSEurofirst 300 <> index of top European shares
slipped 0.2 percent, with Germany's DAX <> down a touch
and Britain's FTSE <> slipping 0.2 percent.
Earlier, Japan's Nikkei <> fell 1.3 percent, while
other Asian stock markets <.MIAPJ0000PUS> slid 0.9 percent to
one-week lows. MSCI world equity index <.MIWD00000PUS> edged
down 0.1 percent.
DOLLAR EASES
The dollar lost ground against a basket of major currencies
as U.S. crude prices <CLc1> climbed and on worries about the
banking sector.
"With oil and the dollar seemingly having an inverse
relationship, then if oil comes off the dollar should gain some
support from that and vice versa," said Jeremy Stretch, senior
market strategist at Rabobank.
"People are still broadly reacting from (Moody's downgrades)
... as people continue to worry about ongoing pressures in the
financial sector," he added.
The dollar fell about 0.3 percent on the day versus a basket
of six major currencies <.DXY>. The euro gained 0.3 percent to
$1.5546 <EUR=> and 167.39 yen <EURJPY=R>.
With stocks in the red, government bonds found a steadier
footing after Thursday's sell-off sparked by surprisingly strong
UK retail sales data that underpinned the case for further
interest rate rises.
The 10-year Bund yield <EU10YT=RR> eased nearly 3 basis
points on the day to 4.661 percent, while the benchmark 10-year
yield for U.S. Treasuries <US10YT=RR> slipped 2 basis points
4.19 percent.
(Additional reporting by Sitaraman Shankar and Michael Taylor)
