* Yen builds on sharp overnight gains against dollar, euro
* Russian shares plummet before Sunday’s Crimea referendum
* U.S. stocks near flat shortly after open
By Caroline Valetkevitch
NEW YORK, March 14 (Reuters) - Growing tension between the West and Russia ahead of Ukraine’s weekend referendum in Crimea pushed stocks on major world markets down on Friday and ramped up the flight into safe-haven gold and the yen.
With the West increasingly talking about sanctions, and Russia hitting back with promises of retaliatory measures and displays of military prowess, financial markets were left to watch nervously.
The MSCI global market index was down 0.5 percent and was on track for a loss of 2.3 percent for the week, while gold prices reached their highest level in six months. Spot gold rose as much as 1.4 percent to its highest level since Sept. 9 and was last up 1 percent at $1,383.30 an ounce.
Moscow’s MICEX index fell more than 5 percent before clawing back some of its losses to trade down 1.5 percent. The rouble was at an all-time low.
Part of the concern over the Crimea referendum on Sunday is that it could encourage other pro-Moscow parts of the country to follow suit and potentially embolden Russia in the region.
“There is a lot of anticipation about that Crimea vote coming up, so that is out there, a little bit of uncertainty,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research.
U.S. Secretary of State John Kerry met Russian counterpart Sergei Lavrov in London in last-ditch diplomatic efforts to defuse tensions, but Moscow and the West appeared increasingly far apart.
Russia shipped more troops into Crimea on Friday and repeated its threat to invade other parts of Ukraine. A German newspaper reported that the chief executive officers of Russia’s two largest firms are on a list of those who may be hit next week with European and U.S. sanctions over the Crimea crisis.
U.S. stocks opened little changed, a day after the S&P 500 posted its biggest loss since early February. The Dow Jones industrial average fell 13.55 points or 0.08 percent, to 16,095.34, the S&P 500 lost 1.41 points or 0.08 percent, to 1,844.93 and the Nasdaq Composite dropped 8.525 points or 0.2 percent, to 4,251.895.
The FTSEurofirst 300 index of top European shares was down 0.8 percent. Shares of companies most exposed to Russia were under pressure, including Danish brewer Carlsberg , down 0.8 percent.
In the foreign exchange market, the latest developments in the Ukraine crisis sent the safe-haven yen soaring against both the dollar and the euro. The yen was headed for its biggest weekly gain in more than a month against the dollar. The euro was down 0.3 percent against the yen at 140.88 yen while the dollar fell 0.4 percent to 101.45 yen.
“The risks to global growth both from China as well as from the Crimean situation are supporting yen,” said Manuel Oliveri, FX strategist at Credit Agricole.
The benchmark 10-year U.S. Treasury note last traded up 3/32 in price to yield 2.640 percent.
With Russian assets continuing to slump, investors were taking the view that while the situation did not look good, Vladimir Putin and the Kremlin were unlikely to flinch.
“Obviously Russia will not back down so it all points to an escalation,” Viktor Szabo, a fund manager at Aberdeen Asset Management who holds Ukraine and Russian bonds, said.
Jitters also remained over the degree to which China’s economy is slowing after unsettling data this weak.
Copper, whose demand is seen falling as Chinese economic growth slows, edged higher but was on track for a 5 percent weekly loss.
Benchmark three-month copper on the London Metal Exchange traded up 0.84 percent at $6,469 a tonne in official midday rings, after sinking to a 44-month low of $6,376.25 on Wednesday.
“We have very bad headline risks now, including Ukraine, Russia, Venezuela, growth fears in China and elections in many large emerging economies,” said Jorge Mariscal, chief investment officer of emerging markets at UBS Wealth Management.
In the oil market, Brent crude was up 87 cents at $108.26 a barrel, while U.S. crude futures rose 67 cents to settle at $98.87.