* MSCI world equity index down 0.4 percent at 300.94
* Euro zone PMI, Irish concerns fuel concerns
* Euro lower; dollar rises from six-month trough
By Natsuko Waki
LONDON, Sept 23 (Reuters) - World stocks slipped on Thursday
while the euro fell broadly as a survey showed a slowdown in
growth of the euro zone services and manufacturing sectors and
concerns intensified about the region's banks.
Investors demanded a higher premium to hold Irish government
bonds than benchmark German bunds. Investors grew nervous about
possible restructuring of riskier subordinated debt issued by
Anglo Irish Bank as government guarantees for such instrument
expire next week. []
The Markit survey showed the euro zone services purchasing
managers index fell to its lowest reading since February while
manufacturing PMI fell to its slowest level since January.
[]
"The bottom line is that growth momentum continues to
moderate," said Marco Valli, economist at UniCredit.
MSCI world equity index <.MIWD00000PUS> fell 0.4 percent,
off its four-month high hit on Wednesday. The Thomson Reuters
global stock index <.TRXFLDGLPU> lost half a percent.
The FTSEurofirst 300 index <> dropped 0.7 percent.
Emerging stocks <.MSCIEF> fell 0.15 percent. Markets in
Japan, China, Hong Kong and South Korea were closed for a
holiday.
The bund futures <FGBLc1> rose 61 ticks. The 10-year
Irish/German government bond yield spread <IE10YT=TWEB>
<DE10YT=TWEB> widened by 21 basis points on the day to 438 bps,
a euro lifetime high.
"Spain, Portugal, Greece, Ireland are under significant
pressure in the coming months to put forward retrenchment
measures in their budgets for 2011," said Bernard McAlinden,
investment strategist at NCB Stockbrokers in Dublin.
The cost of insuring five-year Irish government debt against
default rose to 500 bps from 460 bps late on Wednesday.
The dollar <.DXY> rose 0.3 percent against a basket of major
currencies having hit a six-month low on Wednesday.
The euro fell against the dollar <EUR=> and sterling
<EURGBP=>.
The dollar had come under pressure after the Federal Reserve
promised on Wednesday to ease monetary policy further if needed
to support the economy.
The prospect of more money printing -- or a second round of
quantitative easing -- weighed on the dollar, while bolstering
emerging markets and dollar-priced commodities.
"The FOMC's logic appears to have shifted from 'No QE2,
unless economy deteriorates' to 'QE2, unless economy improves
significantly'," said Ciaran O'Hagan, strategist at Societe
Generale.
U.S. crude oil <CLc1> fell one percent to $73.97 <CLc1>,
while gold stood at $1,291.35 an ounce <XAU=>, near a record
high set on Wednesday. As a hard asset and also a currency, gold
tends to benefit during times of loose monetary policy because
it cannot be devalued by money printing.
(Editing by Toby Chopra)
