* China bank reserves hike raises fears of more tightening
* Copper down on Chinese imports data; oil drifts lower
* World stocks fall; dollar hits a two-week high
* Irish spreads hit a euro lifetime high
By Dominic Lau
LONDON, Nov 10 (Reuters) - World stocks and copper prices
fell on Wednesday on concerns about softening demand from China
after slower-than-expected import data, while the dollar
recovered further and hit its highest level in two weeks.
Borrowing costs for Ireland rose to a euro lifetime high
after a clearing house raised margin requirements for Irish
debt, highlighting nervousness about the country, which is
struggling to pass the first of four austerity budgets next
month.
Data showed Chinese October import growth was slower than
expected, indicating softening domestic demand.
China, a major engine of global growth, has also raised
required reserves for its biggest banks to mop up some of the
cash that is streaming into the country and posing a growing
inflationary threat, following a fresh round of money-printing
by the U.S. Federal Reserve. []
The move fuelled worries that Chinese authorities may
further try to cool economic expansion.
"Growth in China imports has slowed down, that will be a bit
of a concern for the market," Heino Ruland, strategist at Ruland
Research in Frankfurt, said. "But earnings have been better than
expected and any dip could be a buying opportunity."
Stock markets in Hong Kong <> and China <> fell,
while world equities measured by the MSCI All-Country World
Index <.MIWD00000PUS> lost 0.5 percent.
Japan's Nikkei average <> rose 1.4 percent to its
highest close in more than four months, buoyed by financial
shares, with Mizuho Financial <8411.T> up 7.6 percent, after a
report that most major Asian banks may be exempt from planned
new global rules. []
However, people close to the G20's taskforce on financial
regulation said global regulators have yet to draw up lists of
banks judged "too big to fail". []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
G20 battle lines: http://r.reuters.com/jux34q
Reshaping financial rules: http://r.reuters.com/zys68p
FX futures positioning: http://r.reuters.com/kus26k
Currency tensions package: http://r.reuters.com/deh58p
Euro zone struggles with debt: http://r.reuters.com/hyb65p
Ireland's bailout graphic: http://r.reuters.com/wuv48p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
U.S. stock index futures <SPc1> <DJc1> <NDc1> were down 0.05
to up 0.1 percent, indicating a steady open on Wall Street,
ahead of weekly jobless claims data.
Europe's FTSEurofirst 300 <> dropped 0.3 percent, led
by commodity stocks after China's copper imports fell to their
lowest level for a year and oil shipments were down 30 percent.
Copper <CMCU3> fell 1.3 percent, while gold <XAU=> rose 0.8
percent though off its record high hit in the previous session.
Oil eased 0.2 percent to trade below $87 a barrel after
hitting a two-year high on Tuesday.
DOLLAR BOUNCE
The dollar index <.DXY>, which measures the greenback
against a basket of major currencies, rose 0.4 percent,
recovering from a 11-month low last week.
The correlation between Europe's broad STOXX 600 index
<> and the dollar index hit -0.93 on a rolling 25-day
average, the strongest negative correlation between the two
indexes since 1993.
The euro <EUR=> dipped 0.1 percent to $1.3766.
Analysts still expect more quantitative easing by the Fed
will continue to sting the U.S. currency versus the euro as the
European Central Bank sticks to its current monetary policy.
"Despite the correction we've been seeing, the euro's bull
trend is still in place," said John Hydeskov, senior currency
analyst at Danske in Copenhagen.
However, the euro zone sovereign debt problem remained a
worry for investors. European clearing house LCH.Clearnet
announced it has hiked margin requirements for Irish debt.
The premium investors demand to hold 10-year Irish
government bonds <IE10YT=RR> rather than benchmark German Bunds
<DE10YT=RR> widened by 10 basis points to 582 bps.
"Though the LCH announcement overnight wasn't good, it has
largely already been priced in, it doesn't inspire confidence,"
a bond dealer in Dublin said. "What with the budget (issue)
still out there, we'll be under pressure until that's passed."
Yields on 10-year German Bunds rose 4 bps to 2.479 percent,
while those on 10-year U.S. Treasuries <US10YT=RR> rose 3 bps to
2.6967 percent.
(Additional reporting by Joanne Frearson, Blaise Robinson,
Naomi Tajitsu, George Matlock and Paul Day; Editing by Giles
Elgood)
