HONG KONG, April 12 (Reuters) - Hong Kong shares rose on Thursday lifted by the rally in mainland markets on the back of reports of proposals to boost economic development in Shenzen as well as optimism of easier monetary policy following GDP data due later in the week.

  The Hang Seng Index closed higher after three successive days of losses and finished up 0.9 percent at 20,327.32. The China Enterprises Index closed up 1.5 percent.

  On the mainland, the Shanghai Composite rose 1.8 percent in its biggest gain in two months.

 

  HIGHLIGHTS

  * Local Hong Kong banking shares, led by BOC Hong Kong , rose after a report on Chinese Internet portal Sina.com said China will start a pilot project to allow Hong Kong banks to lend yuan directly to Shenzhen firms and vice visa. BOC HK shares rose 3.5 percent.

  * Macau gaming stocks had a strong day following the unveiling of the gambling enclave's newest casino on Wednesday by Sheldon Adelson-owned Sands China. Sands shares closed up 3.2 percent.

  * Bucking the trend, shares of contract handset manufacturer Foxconn Holdings slumped 7.4 percent after major customer Nokia forecast losses for the next two quarters as it struggles to revamp its product line. {ID:nL6E8FB07U] Foxconn shares fell to their lowest in more than two months and have nearly erased all their gains for the year.

  (Reporting by Vikram Subhedar Editing by Jacqueline Wong)

* Weekly jobless claims rise 13,000

  * Producer prices unchanged in March

  * Trade balance narrows sharply in February

  WASHINGTON, April 12 (Reuters) - The number of Americans filing for jobless aid rose last week to the highest level since January, a development that could raise fears the labor market recovery was stalling after job creation slowed in March.

  Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 380,000, the Labor Department said on Thursday, defying economists' expectations for a drop to 355,000.

  The four-week moving average for new claims, considered a better measure of labor market trends, rose 4,250 to 368,500.

  Some economists blamed the Easter holidays for the spike in claims and expected applications to trend lower in coming weeks.

  " It's very difficult to know the extent to which that's driven by seasonal effects from Easter or not," said Eric Green, chief economist at TD Securities in New York.

  " This is not a game changer, this does not confirm the weakness in the report we saw last Friday. We suspect that much of the increase was due to seasonal issues and we would therefore expect it to drift lower."

  The claims data comes in the wake of Friday's disappointing employment report for March, which showed the economy created 120,000 new jobs, the smallest amount since October.

  Despite the rise in claims last week, both first-time applications for unemployment aid and the four-week average held below the 400,000 mark, implying steady job gains.

 

  U.S. stock index futures pared gains on the data, while U.S. government debt prices rose. The dollar weakened against the euro and the yen.

  There was good news in other data on Thursday, with producer prices flat in March and the trade deficit narrowing sharply in February.

  The U.S. trade deficit shrank 12.4 percent to $46 billion in February, the biggest month-to-month decline since May 2009, the Commerce Department said, as exports hit a record high.

  That could prompt economists to raise their estimates for first-quarter gross domestic product.

  U.S. producer prices were unchanged last month after advancing 0.4 percent in February.

  Economists polled by Reuters had expected prices at farms, factories and refineries to rise 0.3 percent.

  Wholesale prices excluding volatile food and energy costs rose 0.3 percent after February's 0.2 percent gain.

  That was a touch above economists' expectations for a 0.2 percent advance and marked the fifth successive month of increases in core PPI.

  Over one-third of the rise in core PPI was attributed to prices for light motor trucks. Higher costs for passenger cars, soaps and detergents also contributed to the advance in core PPI.

  However, manufacturers have limited scope to pass on these increased costs to consumers given the still considerable slack in the economy.

  Overall producer prices were held back by a 2.0 percent fall in gasoline, the largest decline since October, after a 4.3 percent jump in February. That offset a 0.2 percent rise in food prices, which halted three straight months of declines.

  However, gasoline prices rose 7.5 percent, when seasonal factors are excluded.

  In the 12 months to March, wholesale prices increased 2.8 percent, the smallest increase since June 2010, after advancing 3.3 percent in February.

  Outside food and energy, producer prices were pushed up by light motor trucks prices, which rebounded 0.7 percent after falling 0.4 percent in February. Passenger car prices rose 0.8 percent after edging up 0.1 percent the prior month.

  The increases likely reflected strong demand for automobiles.

  In the 12 months to March, core producer prices increased 2.9 percent after rising 3.0 percent the previous month. (Reporting By Lucia Mutikani Editing by Neil Stempleman)

(Changes dateline)

  * Spot gold up $10, 0.5 pct, after gloomy jobs data

  * Dollar index, stock futures tumble

  * Trading activity nearly nil due Easter holiday

  * Bullion still set for 1.8 pct loss after Fed minutes (Recasts with jobs data, updates throughout)

  By Jonathan Leff

  NEW YORK, April 6 (Reuters) - Gold rose modestly in anaemic spot trade on Friday after disappointing U.S. payrolls figures revived talk about an extension of the Federal Reserve's stimulus measure, but gains were too mild to stem the first weekly loss in three weeks.

  With only a handful of ticks registering in the cash market due to the U.S. and European exchange holidays, spot gold was bid at $1,637.99 an ounce by 8.54 am EST (1354 GMT), up about 0.5 percent on the day and around $7 higher than just before the U.S. non-farm payrolls data. For the week bullion was down 1.8 percent.

  U.S. payrolls rose by just 120,000 jobs last month, lower than even the most pessimistic analyst had predicted and the smallest gain since October, the Labor Department said on Friday. The unemployment rate fell to a three-year low of 8.2 percent as the labour force shrank.

  " This is going to turn up the heat on the debate for QE3 since a deceleration in the economic data has been highlighted as a pre-requisite for such a programme," said Thomas Simons, money market economist at Jefferies & Co in New York.

  The S& P stock index futures fell more than 1 percent and the U.S. dollar index lost 0.3 percent as the data suggested gloomier economic conditions than expected, but with equity and money markets shut for the holiday the full extent of reaction will not be apparent until Monday.

  With trading conditions so thin, it is unclear whether the data will be enough to dispel the downbeat mood that prevailed on Tuesday, when minutes from a U.S. Federal Reserve policy meeting showed a waning appetite for another round of bond purchases.

  Bullion touched a near three-month low of $1,611.80 earlier this week, but has cautiously crept higher in the past two days on technical buying and, now, new hope that the door for further monetary policy support may be open wider than earlier believed.

  Earlier in the week strength in the dollar had dimmed gold's safe-haven appeal as fears about the euro zone debt crisis resurfaced after a Spanish government debt auction this week was poorly received.

  A stronger greenback makes dollar-priced commodities more expensive for buyers holding other currencies.

  Spot silver was little changed after the data, holding gains of 0.2 percent at $31.72, extending a 1.1-percent rise in the previous session. The metal is on course for a weekly fall of 1.5 percent. (Additional reporting by Rujun Shen in Singapore editing by Keiron Henderson)

* World markets could fall following soft U.S. payrolls data

  * U.S. stock futures point to weak open on Monday

  * European markets closed on Monday

  * Euro rallies, off three-week lows vs dollar (Moves data on stock futures)

  By Chikako Mogi and David Gaffen

  NEW YORK/TOKYO, April 6 (Reuters) - World stock markets look poised to fall early next week and safe-haven government debt prices could rally after U.S. employment figures fell short of expectations on Friday.

  U.S. stock futures fell more than 1 percent and Treasuries prices rallied after U.S. payrolls grew by 120,000 in March, far below the expected gain of 203,000 jobs.

  The MSCI All-County World Index has dipped 2.9 percent after hitting an eight-month high on March 27. Concerns about slower growth in the United States and China, along with a revival of worries about the euro-zone debt crisis, have reduced appetite for stocks.

  " I think the market will grind higher, but it will be at a much slower pace," said Jack Ablin, chief investment officer at Harris Private Bank. " Earnings and jobs aren't helping."

  The focus next week is likely to be on several key economic releases from China and the beginning of U.S. earnings season.

  Signals that central bankers are unlikely to inject more stimulus has undermined demand for equities.

  The S& P 500's loss for the week of 0.7 percent was its biggest weekly decline of the year as yields on Spain's debt marched higher and its equity market plumbed lows not seen since the height of the euro zone's crisis last year.

  Spain's rising bond yields, which have renewed concerns about Europe's debt problems, could temper buying interest in coming weeks. Along with Spain, yields in highly indebted Italy rose on Thursday, boosting investors' safe-haven appetite for U.S. Treasuries and German Bunds, as well as gold.

  The euro-zone debt crisis receded from the headlines after heavy doses of stimulus from the European Central Bank late in 2011.

  A slew of data due next week from China, the world's second largest economy after the United States, deterred investors in Asia from taking fresh positions at the end of the week. Signs of a sharper-than-expected slowdown could further undermine sentiment.

  " The data from China will be the key measuring stick on how confidence will hold up," said Yoon So-jung, an analyst at Shinyoung Securities.

  China is set to release first-quarter gross domestic product, inflation figures and trade balance data.

  U.S. markets next week will focus on the beginning of earnings season, as bellwethers J.P. Morgan Chase & Co and Google Inc are expected to report results.

  U.S. earnings growth is expected to come in at 3.2 percent for the first quarter, but that figure falls to 1.8 percent year-over-year growth when Apple Inc, the world's biggest company by market value, is excluded.

  The weak U.S. payrolls report for March could renew hopes for more stimulus from the Federal Reserve. That could conceivably help stocks and hurt the dollar.

  However, this week's release of minutes from the Fed's March meeting suggested less appetite for additional buying of government debt, even as committee members expressed worries about the sluggish pace of U.S. growth.

  " The question for the dollar is whether this is as viewed as an outlier in an otherwise improving trend in labor markets or if it's viewed as enough to revive talk of another round of Fed policy easing," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington D.C.

  The euro rose against the dollar to $1.3087 after hitting a three-week low of $1.3035 on Thursday, while the dollar index, measured against key currencies, slipped from three-week highs to 79.86.

  Trading volumes were light because of the Good Friday holiday and market closings in Europe, and Treasuries rallied sharply, with the benchmark 10-year note up 1-2/32 in price to yield 2.065 percent.

  S& P 500 futures fell 16.2 points, or 1.2 percent, to 1374, suggesting a weak open on Monday. Nasdaq 100 futures dropped 1.1 percent, or 31.25 points, to 2722.50 in thin trading. Dow futures dropped 137 points, or 1.1 percent, to 12,841.

  Gold ticked higher to $1,637.99 an ounce in thin trade on Friday but ended down 1.8 percent on the week. Bullion hit a near three-month low of $1,611.80 this week.

  Oil rose on Thursday after two straight days of losses on firm U.S. data and fears of Iran-related supply disruptions. Brent crude futures climbed 0.89 percent to settle at $123.43 a barrel, and U.S. crude jumped 1.81 percent to settle at $103.31. (Additional reporting by Dominic Lau in Tokyo and Joonhee Yu in Seoul Editing by Padraic Cassidy)

TOKYO (Reuters) - Japanese Finance Minister Jun Azumi said on Saturday Japan would hold high-level talks with China over contributions to the International Monetary Fund to help ease the euro zone debt crisis ahead of a G20 finance leaders' meeting in Washington.

  The two nations have not yet decided whether to increase contributions to the IMF after the euro zone expanded its bailout capacity last month, Azumi told reporters after meeting his Chinese counterpart, Xie Xuren.

  " Europe's problem has eased from a critical situation seen last year but it is not a situation where we can be optimistic. We need to watch the situation cautiously," Azumi told reporters.

  " As for contributions to the IMF, we will hold high level talks towards the G20 meeting in Washington."

  The European Union expects G20 leaders to agree to contribute more money to the IMF this month after Europe expanded its own bailout capacity to 700 billion euro from 500 billion.

  Azumi also said he wants Japan and China to lead the global economy this year and Japan's economy will be able to achieve its goal of real growth rate of about 2 percent this fiscal year.

  " It is Asia's economy that has to lead the global economy. Especially, the economies in Japan and China need to achieve steady improvement," Azumi said.

  " The nation's domestic demand is improving considerably thanks to reconstruction demand," he added, referring to Japan. " There have been various factors such as a strong yen and higher oil prices, but Japan's corporate fundamentals are not bad."

  (Alters headline to eliminate direct reference to minister)

BEIJING, April 1 (Reuters) - China's factory slowdown worsened in March as output fell for a fifth consecutive month and manufacturers received fewer orders, a private survey showed, building the case for Beijing to take new policy steps to shore up economic growth.

  HSBC said on Sunday its final Purchasing Managers' Index (PMI) fell to 48.3 in March from 49.6 in February, and largely in line with HSBC's Flash PMI reading of 48.1 for March.

  The sub-index for manufacturing output slid to 47.3 in March from February's 50.2, the second-lowest reading since March 2009 after November's trough of 46.1.

  " Final PMI results confirm a further slowdown of growth momentum, weighed by weakening new export orders," said Qu Hongbin, an economist at HSBC. " Weaker export growth is likely to prompt further easing measures."

  Survey results showed both foreign and domestic demand were poor. Sub-indices for new orders and new export orders languished below the 50-point level that separates expansion from contraction in activity.

  It was the fifth consecutive month that new orders shrank. New export orders rebounded from an eight-month low in February but still contracted in March.

  Worryingly, the survey also showed factory inflation quickened to stay above 50 points despite slower production that shrank factory employment to a three-year low.

  The gloomy PMI reading mirrors the decline in China's actual factory output, where growth slumped to a 2-1/2-year low of 11.4 percent in January and February.

  Some economists have warned against reading too much into China's January and February economic data because they are distorted by the Lunar New Year holiday, but HSBC noted its average PMI readings in the first quarter were the worst in three years.

  Even so, some analysts are hopeful China's economy will speed up after March if Beijing further loosens monetary policy and unveils more state spending.

  Qu expects China to further reduce the amount of cash banks must hold as reserves before the end of June by cutting the reserve requirement ratio by 100 basis points.

  Beijing could also lower taxes and raise fiscal spending to boost activity, he said.

  Below are some notable findings from the PMI report compiled by Markit:

  -- Factories said rising production costs were mainly driven by higher raw material prices and fuel costs.

  -- But manufacturers said they have not passed on higher costs to their customers. Instead, they said they have resorted to cutting prices to attract or retain clients as their output prices stayed below 50 points for the fifth straight month.

  -- Factories have shed jobs in three of the last four months with manufacturers citing slowing business, employee resignations and company restructuring as reasons.

  -- Suppliers' delivery times lengthened in March due to transportation problems, supply bottlenecks and labour shortages.

  For more news on China's economy, see (Reporting by Koh Gui Qing Editing by Kim Coghill and Benjamin Kang Lim)

(Repeats for additional subscribers with no change to text)

  * More gas should save at least 100,000 bpd in crude

  * Saudi Aramco manages world's 4th-largest gas reserves

  * Demand for power plant fuel rising 6 pct per year

  By Daniel Fineren and Reem Shamseddine

  DUBAI/KHOBAR, March 30 (Reuters) - Saudi Arabia is likely to burn less crude in its power plants this summer thanks to rising output from dedicated gas fields and gas that would be associated with any increase in oil output to make up for lower Iranian production.

  Last summer the world's leading oil exporter burned an average of 730,000 barrels a day (bpd) of crude for electricity to keep the population cool in the hottest months from July to the end of September, official figures indicate.

  Hundreds of thousands of barrels of the kingdom's biggest export will again go up in smoke at power plants each day this summer, but the volume of oil used for power is likely to fall.

  More supply from the Karan gas field and a likely rise in crude output, which would bring a bonus benefit of more gas as well, should save at least 100,000 bpd in crude use.

  " We have spent a lot of money on gas ... and we have many tricks in our pocket in the summer. When we peak in summer, we will surge our gas," Saudi Oil Minister Ali al-Naimi said last week.

  Naimi said some 500 million cubic feet a day (mcfd) more gas, or around 90,000 barrels of oil equivalent (boed), would be made available for three or four months.

  " So don't think we are just saying, 'OK, the crude demand is going to go up'," he told reporters in Doha. " We are far more concerned about crude burn. Not because we want to export it, but because it is a shame to burn it."

  Most countries outside the Middle East cut back oil-fired power generation long ago in favour of gas, nuclear and renewable energy sources.

  But in a country sitting on the world's largest oil reserves, the consumption of oil for power rose by an implied 260 percent from 2004 to 2010, official figures available through the Joint Oil Data Initiative (JODI) indicated.

  While crude output from Saudi oilfields is constrained by OPEC production limits, state-run Saudi Aramco aims to find gas that can be pumped independently to supply rapidly rising demand for electricity.

  Saudi Aramco now manages known gas reserves of 279 trillion cubic feet, the fourth largest in the world, and hopes to increase its gross gas production from 10.2 billion cubic feet per day (bcfd) in 2010 to over 15 bcfd by 2015.

  While it has raised output significantly over the past few years, the company has not been able to keep up with a 6 percent per year increase in demand, driven by population growth and a boom in petrochemicals and other industries.

  " Whenever there is gas, we are utilizing it. We are always trying to use gas rather than other types of fuel. Gas is cleaner, cheaper and more efficient," Ali Bin Saleh Al-Barrak, the chief executive of Saudi Electricity (SEC), told Reuters.

  " We are expecting more gas to come this year and in the future."

  About half of Saudi power demand is now met with gas, but in a sign SEC does not expect to obtain enough gas to replace oil soon, SEC announced plans this month to build another big fuel oil plant.

  Low fixed gas prices paid by industry of just $0.75 per million British thermal units are the major impediment to the unlocking of gas reserves.

 

 

  OIL BURN

  After rising from an average of 145,000 bpd in 2004 to 526,000 bpd in 2010, implied Saudi oil burning was little changed at 522,000 bpd in total last year, according to an analysis of JODI data by HSBC.

  Implied crude burning - or crude that cannot be accounted for after exports, refinery intake and changes in stocks - doubled from 2008 to 2009 as a 1 million bpd fall in crude production at the height of the global financial crisis cut the availability of associated gas.

  A 1.15 million bpd rise in average daily crude production from 2010 to 2011 - as Riyadh filled a Libyan oil supply drop - would have added roughly 70,000 boed of gas, HSBC's Saudi energy sector analyst John Tottie estimated.

  " Crude burning was unchanged in 2011, but there was some more diesel and gasoil in the power sector mix," Tottie said. " Higher associated gas and Karan probably contributed."

  Last summer, record imports of diesel, gasoil and fuel oil, which is used to generate power in parts of the country far from oil or gas fields, contributed to the first hiatus in the rise of crude burning since 2003.

  Tightening western sanctions on Iranian oil sales, particularly a European ban from July 1, offers Riyadh a chance to pump even more oil and associated gas this summer. Because the kingdom holds most of the world's spare oil capacity, it will be the biggest source of alternative supply.

  Last year's 9.31 million bpd average Saudi crude production could be surpassed this year. Production averaged 9.84 million bpd in the first two months of 2012, Saudi industry sources have told Reuters, compared with 8.77 mln bpd in the same period of 2011, according to JODI data.

  As 50 to 60 percent of Saudi gas comes from oilfields, another 1 million bpd increase in crude production above current levels could increase associated gas output by 5 to 6 percent, which could further increase the amount of crude for export by reducing the amount burnt in power plants.

  " Burning crude oil is a crime," independent Kuwaiti energy analyst Kamel al Harami said.

  " This summer, I think Saudi will depend more on gas and buying oil products and less on burning their own crude."

  Vital to this effort will be the ramp-up of Karan, Saudi Aramco's first non-associated offshore gas field, which is expected to lift raw gas production from 400 mcfd last summer to 1.5 bcfd by June to 1.8 bcfd in summer 2013.

  " Gas supplies coming from Karan this year are very important as a substitute for crude oil burning," Sadad al Husseini, a former top executive at Aramco said.

  Of Karan's 1.1 bcfd output increase since last summer, industry observers estimate about 75 percent (or 146,000 boed) could go to power plants after removing liquids and sulphur.

  Karan might not be the only addition to Saudi gas supplies. Oil minister Naimi said last week a little-known gas field in the Gulf, called Rabib, could boost supplies by 500 mcfd, or nearly 90,000 boed, sometime this year.

  Information about Rabib is scarce, but Naimi said its gas could be pumped into turbines with minimal treatment. An industry analyst said as much as 95 percent of Rabib's gross gas output could be usable by power plants.

  With Rabib and Karan both running flat out and sending all usable output to power plants, which is far from certain, that would mean around 236,000 boed could be saved.

  A 1 million bpd crude output rise could add roughly another 73,000 boed of associated gas, allowing for a 25 percent reduction for removal of liquids and impurities.

  The overall impact on Saudi oil consumption is impossible to predict accurately because power demand is tightly bound to temperatures it is unclear how much oil it will pump and the power generation mix will change as these variables shift.

  Nearly half the potential increase from the two dedicated gas fields could be canceled out by the annual increase in Saudi demand for power generation, which HSBC estimated in a March study would amount to 100,000 boed, or 600 mcfd.

  " There are competing demands for that gas, and the power sector has been last in line," Tottie said.

By Kevin Lim and Saeed Azhar

  SINGAPORE, April 1 (Reuters) - After two years of hard work to improve Singapore's largest bank and lift its underperforming Hong Kong unit, DBS Group chief executive Piyush Gupta is embarking on his biggest challenge yet - a bid for Indonesia's Bank Danamon.

  Gupta, 52, a graduate of the prestigious Indian Institute of Management, joined DBS in November 2009 from Citigroup where he was last head of Southeast Asia and Australasia.

  " You look at the results in the last two years and look at all the operational metrics - you've seen an incredible story there," Dilhan Pillay Sandrasegara, head of portfolio management at Singapore state investor Temasek Holdings, told Reuters in a recent interview. " It augurs well for DBS."

  Now a Singapore citizen, Gupta has spent a large part of his career in India and Southeast Asia, areas where DBS is keen to grow. Those who know him say he is meticulous and hardworking but some question his abilities as a visionary leader.

  His achievements at DBS include strong growth in private and premium banking, a higher market share in loans and a foothold in the fast-growing area of yuan-denominated offshore bond issuance and deposits by tapping into the bank's relatively large presence in Hong Kong.

  DBS had record net profit of more than S$3 billion ($2.39 billion) last year and ranked top earlier this year in customer satisfaction among the city-state's financial institutions in a survey by Singapore Management University.

  Before Gupta's arrival, DBS was often criticised for poor service, high workforce turnover and hiring outsiders, many of them foreigners, to replace long-serving local staff. A popular joke at the time was that DBS stood for " Don't be Singaporean" .

  Temasek, which owns 29 percent of DBS, is in talks to sell its 68 percent stake in Danamon to the Singapore lender in a deal likely to be worth more than $3.2 billion.

  Taking over Danamon poses many challenges but the biggest will be persuading investors that DBS will not overpay as it did when it bought Hong Kong's Dao Heng Bank more than a decade ago.

  Gupta, a keen golfer, also must show he is equally adept at taking over and integrating a new operation as he is at improving existing businesses.

  " We think DBS's turnaround is under way and has started generating significant alpha (a risk-adjusted measure of investment return)," JPMorgan analyst Harsh Wardhan Modi said in a recent note.

  The risk, he said, comes from mergers and acquisitions that erode value.

 

  INDONESIA WILL BE TESTING

  Gupta was one of Citigroup's earliest recruits in Asia under the U.S. bank's management associate programme and he benefited from its policy of moving people across businesses.

  People who have worked with him say he has a good grasp of detail that reflects his experience in consumer and corporate banking. He is tough on senior managers but charming with customers and junior employees.

  In Southeast Asia, he built up Citigroup's branch network in Malaysia and helped Indonesia to restructure its debts after the Asian financial crisis of 1997-98.

  In 2000, at the height of the dotcom bubble, he left Citigroup to head an Internet portal called go4i.com. It folded despite backing from the private equity arm of Chase Manhattan Bank and one of India's top media firms.

  Two former colleagues, who declined to be named, said that while Gupta was highly rated as an operations man at Citigroup, he was not seen as someone who could lead the breaking of new ground.

  Gupta will be tested in Indonesia where rules on foreign bank ownership change frequently.

  Teguh Hartanto, a senior banking analyst at PT Bahana Securities in Jakarta, said DBS faces several hurdles in ensuring Danamon will be a reliable contributor to profits.

  " The question is: How high is the valuation for Danamon?" he said. " The challenge for Danamon is harder over the coming years as their cost of funding is expensive compared to other banks."

  Danamon, he added, will also be hurt by new Indonesian central bank rules on downpayments as around 50 percent of its profit comes from its unit Adira Finance.

  " Perhaps Temasek thinks it's time to let DBS take over Danamon to lower its risk," Hartanto said.

  ($1 = 1.2574 Singapore dollars) (Additional reporting by Janeman Latul in JAKARTA Editing by John O'Callaghan and Jonathan Thatcher)

By Antoni Slodkowski

  TOKYO (Reuters) - Japan will support Jim Yong Kim, the U.S. nominee for the next World Bank head, Japanese Finance Minister Jun Azumi said on Sunday after meeting the candidate who is in Tokyo on his world tour to seek support for the candidacy.

  Kim, a Korean-American, will be contesting against two nominees from emerging market countries - Nigerian Finance Minister Ngozi Okonjo-Iweala and former Colombian Finance Minister Jose Antonio Ocampo - for the Washington-based institution's top job.

  " We decided he is an extremely suitable candidate for the World Bank presidency and we will support him," Azumi said, stressing his track record working on HIV/AIDs issues with the World Health Organisation.

  Azumi said that the right candidate for the job would understand Japan's stance as a major contributor country and would be able reflect that in the World Bank's policies.

  Kim, a physician and anthropologist, was named by the Obama administration in March as the U.S. pick to succeed Robert Zoellick when he steps down in June.

  By tradition, an American has headed the World Bank since its founding after World War Two, but the emerging economies are increasingly open about challenging that convention.

  " Mr Kim's mother and father are from the Korean Peninsula. He is of course the U.S. nominee, but he also fully understands the position of developing countries heaving spearheaded the efforts to eradicate AIDS at the WHO," said Azumi in a bid to reassure emerging economies.

  Next on the agenda of Kim's " listening tour" as the U.S. Treasury Department calls the trip, is Seoul, New Delhi, Brasilia and Mexico City. He is touring the world between March 27 and April 9 to meet heads of state, finance ministers and others to talk about priorities for the World Bank.

  The candidate is the president of Ivy League university Dartmouth College, was born in South Korea, but moved to the United States as a boy.

  (Reporting by Antoni Slodkowski Editing by Ed Lane)

By Chuck Mikolajczak

  NEW YORK, March 30 (Reuters) - After the best first quarter in 14 years, the S& P 500 may be poised for a pullback as investors look to a slew of economic data for insight on the strength of the domestic economy.

  The Dow and the S& P 500 closed out their best first quarter since 1998 and the Nasdaq had its best first-quarter performance since 1991, largely on the back of improving domestic economic data.

  Economic indicators next week include data on manufacturing and services from the Institute for Supply Management, construction spending, factory orders and domestic car sales as well as several reports on the labor market, culminating in Friday's payrolls number.

  The benchmark S& P 500 index could be vulnerable to a retreat if the data shows a softening of the economy, a possibility many investors have been cautiously eyeing with the index up nearly 30 percent from its October low.

  " The remarkable part of the first quarter is you really didn't have any major piece of economic data in the U.S. that disappointed the market," said Dean Junkans, chief investment officer of Wells Fargo Advisors and Wells Fargo Private Bank in Minneapolis.

  " It was really a no drama, no surprise quarter and the market may not be fully appreciating that we could have some surprises here in some of the data coming up."

 

  MARCH JOBS AND FED MINUTES

  Equity markets will be closed at the end of the week for the Good Friday holiday, which could create lighter volume and increase volatility. The holiday also conflicts with the release of the the March payrolls report, which could leave investors reticent to make big bets in front of the data.

  Economists polled by Reuters are looking for an addition of 201,000 jobs in March, compared with February's 227,000. They expect the U.S. unemployment rate to remain steady at 8.3 percent.

  " People are looking for a little more out of the data, but it ultimately depends on how the numbers come in relative to expectations - it's all about beating or missing expectations," said Joseph Tanious, market strategist at J.P. Morgan Funds in New York.

  " That will likely dictate the market the following Monday after Good Friday."

  Along with dealing with a short week and a glut of economic data, investors will have to grapple with Tuesday's release of the minutes from the most recent Federal Open Market Committee meeting and an interest-rate decision on Wednesday by the European Central Bank after its meeting.

  " The underlying issue in Europe - the sovereigns themselves being solvent - has not been resolved," Tanious said. " I would suspect you will continue to see some flare-ups in Europe that will rattle markets here in the U.S."

  The ECB is expected to keep interest rates unchanged with no major announcements on other policy decisions while the Fed minutes will not be followed up with a press briefing by U.S. Federal Reserve Chairman Ben Bernanke.

  Comments from Bernanke signaling a supportive monetary policy on Monday lifted stocks more than 1 percent and helped boost the index higher for the week despite three consecutive sessions of declines. Investors will look to the FOMC minutes for any change in language.

 

  WARMING UP FOR EARNINGS SEASON

  The earnings calendar is light, with Monsanto Co and Constellation Brands Inc the only S& P 500 companies due to release results. Investors will be gearing up for the unofficial start of earnings season the following week, when Alcoa Inc > reports on April 10.

  Also on tap are same-store sales from retailers on Thursday, which could give further insight on consumer habits on the heels of Friday's consumer sentiment and personal income and spending data.

  " You've got manufacturing, service, retail and jobs all coming out during the week, plus you are going to have people next week start to think about first-quarter earnings," Junkans said.

  But even if equities do pull back - and with more than 80 percent of the benchmark S& P 500 above the 200-day moving average - the market would appear primed for one, analysts cautioned it was more likely to be a healthy decline.

  " If you get weakness initially in April, no one is going to really panic unless all of a sudden, the bottom falls out," said Ken Polcari, managing director of ICAP Equities in New York.

  " But I don't suspect that is going to happen because I still believe we are the prettiest girl on the block and that if the market gets weak, there is still plenty of money to be put to work."

  (Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: charles.mikolajczak(at)thomsonreuters.com) (Reporting by Chuck Mikolajczak Editing by Jan Paschal)

By Chuck Mikolajczak

  NEW YORK, March 30 (Reuters) - After the best first quarter in 14 years, the S& P 500 may be poised for a pullback as investors look to a slew of economic data for insight on the strength of the domestic economy.

  The Dow and the S& P 500 closed out their best first quarter since 1998 and the Nasdaq had its best first-quarter performance since 1991, largely on the back of improving domestic economic data.

  Economic indicators next week include data on manufacturing and services from the Institute for Supply Management, construction spending, factory orders and domestic car sales as well as several reports on the labor market, culminating in Friday's payrolls number.

  The benchmark S& P 500 index could be vulnerable to a retreat if the data shows a softening of the economy, a possibility many investors have been cautiously eyeing with the index up nearly 30 percent from its October low.

  " The remarkable part of the first quarter is you really didn't have any major piece of economic data in the U.S. that disappointed the market," said Dean Junkans, chief investment officer of Wells Fargo Advisors and Wells Fargo Private Bank in Minneapolis.

  " It was really a no drama, no surprise quarter and the market may not be fully appreciating that we could have some surprises here in some of the data coming up."

 

  MARCH JOBS AND FED MINUTES

  Equity markets will be closed at the end of the week for the Good Friday holiday, which could create lighter volume and increase volatility. The holiday also conflicts with the release of the the March payrolls report, which could leave investors reticent to make big bets in front of the data.

  Economists polled by Reuters are looking for an addition of 201,000 jobs in March, compared with February's 227,000. They expect the U.S. unemployment rate to remain steady at 8.3 percent.

  " People are looking for a little more out of the data, but it ultimately depends on how the numbers come in relative to expectations - it's all about beating or missing expectations," said Joseph Tanious, market strategist at J.P. Morgan Funds in New York.

  " That will likely dictate the market the following Monday after Good Friday."

  Along with dealing with a short week and a glut of economic data, investors will have to grapple with Tuesday's release of the minutes from the most recent Federal Open Market Committee meeting and an interest-rate decision on Wednesday by the European Central Bank after its meeting.

  " The underlying issue in Europe - the sovereigns themselves being solvent - has not been resolved," Tanious said. " I would suspect you will continue to see some flare-ups in Europe that will rattle markets here in the U.S."

  The ECB is expected to keep interest rates unchanged with no major announcements on other policy decisions while the Fed minutes will not be followed up with a press briefing by U.S. Federal Reserve Chairman Ben Bernanke.

  Comments from Bernanke signaling a supportive monetary policy on Monday lifted stocks more than 1 percent and helped boost the index higher for the week despite three consecutive sessions of declines. Investors will look to the FOMC minutes for any change in language.

 

  WARMING UP FOR EARNINGS SEASON

  The earnings calendar is light, with Monsanto Co and Constellation Brands Inc the only S& P 500 companies due to release results. Investors will be gearing up for the unofficial start of earnings season the following week, when Alcoa Inc > reports on April 10.

  Also on tap are same-store sales from retailers on Thursday, which could give further insight on consumer habits on the heels of Friday's consumer sentiment and personal income and spending data.

  " You've got manufacturing, service, retail and jobs all coming out during the week, plus you are going to have people next week start to think about first-quarter earnings," Junkans said.

  But even if equities do pull back - and with more than 80 percent of the benchmark S& P 500 above the 200-day moving average - the market would appear primed for one, analysts cautioned it was more likely to be a healthy decline.

  " If you get weakness initially in April, no one is going to really panic unless all of a sudden, the bottom falls out," said Ken Polcari, managing director of ICAP Equities in New York.

  " But I don't suspect that is going to happen because I still believe we are the prettiest girl on the block and that if the market gets weak, there is still plenty of money to be put to work."

  (Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: charles.mikolajczak(at)thomsonreuters.com) (Reporting by Chuck Mikolajczak Editing by Jan Paschal)