NEW YORK (Reuters) - World equity markets rose for a fourth day on Friday but the quarter was set to finish in the red for stocks and other assets as fears of an early withdrawal of U.S. monetary stimulus spiked volatility and weighed on markets.
Weakness in technology shares kept U.S. stocks flat in early trading, while better economic data from Japan and efforts on Friday by China's central bank to ease credit concerns gave other equities markets support. MSCI's world equity index rose 0.5 percent.
The Dow Jones industrial average fell 12.1 points or 0.08 percent, to 15,012.39, the S&P 500 gained 0.59 points or 0.04 percent, to 1,613.79 and the Nasdaq Composite added 8.66 points or 0.25 percent, to 3,410.53.
Market moves were likely to be volatile in the final trading day of the second quarter, as investors pondered the likely impact of an end to the era of cheap money which drove returns in the first half of 2013.
"It's been a tough quarter, the easy game is up and markets have to revaluate where they stand," said Wouter Sturkenboom, investment strategist at Russell Investments.
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Global stock, bond and commodity markets have been highly volatile since Federal Reserve Chairman Ben Bernanke signalled last week that the U.S. central bank would soon cut the pace of its stimulative bond buying unless the economic recovery slows.
Two Fed policymakers came out on Thursday to reassure investors that any winding down of the Fed's $85 billion a month assets purchases was still some way off, though its ultimate course was set.
Fed Governor Jeremy Stein said Friday a longer view is needed for the Fed's policy-setting committee to make a good judgment and to avoid undue market volatility, bolstering the case for withdrawing some stimulus by summer's end.
"The market is going to have to base its views about equities and currencies on actual economic growth rather than simply the fact that there's cheap money there," said Simon Derrick, chief currency strategist at Bank of New York Mellon.
"I think that's a fundamental shift."
A survey of 53 investors across the United States, Europe and Japan by Reuters, released on Friday, found that funds had already cut their average equity holdings in June to a nine-month low due to the recent volatility, and had held more cash.
Gold, which had soared in value as a hedge against higher inflation from all the cheap central bank money being printed, has slumped. Spot gold prices are on track to post their largest monthly loss since October 2008, with prices at levels not seen since August 2010. For the quarter gold lost about 24 percent, the largest such decline on records going back to 1968.
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The end-of-quarter manoeuvring was cited behind the volatility in the euro on Friday. The euro zone single currency was off 0.1 percent to $1.3018 after falling to $1.3006.
The broad FTSE Eurofirst 300 index, which had opened higher in line with other world markets, pared its gains as end-of-quarter positioning took hold. It was down 0.1 percent after sliding 0.5 percent and was on course to end June lower after a record 12 monthly rises.
Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan climbed 1.4 percent, pulling further away from an 11-month low and wiping out this week's losses. It was still down around 7 percent for the year.
China's stock markets had also seen their biggest gains in two months after its central bank, which had let short-term borrowing costs spike to record highs, said it would ensure its policy supported a slowing economy.
Brent crude oil futures climbed 29 cents to $103.11 a barrel, on course for their first monthly rise in five months. Copper was flat but facing its biggest quarterly loss in almost two years, reflecting global growth concerns.
(Additional reporting by Ana Nicolaci da Costa in London; Editing by James Dalgleish)
