* MSCI world equity index up 0.3 pct at 342.91
* China trade data boosting risk appetite; inflation eyed
* Euro hits 3-week low; oil falls
By Natsuko Waki
LONDON, Feb 14 (Reuters) - World stocks edged towards last
week's 30-month high on Monday as China's shrinking trade
surplus underscored its robust domestic demand and talk of
slower-than-expected inflation eased policy tightening concerns.
China's trade surplus fell to its lowest in nine months in
January after imports surged, highlighting China's massive
appetite for raw materials. Solid export growth also hinted at
solidifying recoveries in the U.S. and European economies.
Traders said that China's consumer prices may have risen as
little as 4.9 percent in the year to January, well below the
consensus forecast of 5.3 percent. The official data will be
announced on Tuesday. []
This eased concerns that China's central bank would have to
raise interest rates aggressively.
"The talk of the Chinese inflation data and the export and
import data is going to boost the market," Heino Ruland,
strategist at Ruland Research in Frankfurt said.
"Inflation has been the major worry and there has been a
fear of monetary overkill, but until the data is released (on
Tuesday) we could see a bit of volatility in the market."
The MSCI world equity index <.MIWD00000PUS> rose 0.3
percent, having hit its highest level since Aug 2008 last week.
Thomson Reuters' global stock index <.TRXFLDGLPU> gained
half a percent.
The FTSEurofirst 300 index <> rose 0.6 percent to hit
a 29-month peak.
Emerging stocks <.MSCIEF> added 1.4 percent. Shanghai stocks
<> hit an eight-week high, scoring the index's biggest
single-day percentage gain since mid-December.
U.S. crude oil <CLc1> fell 0.4 percent to $85.28 as tension
in the Middle East dissipated following the resignation of
Egyptian President Hosni Mubarak last week.
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China's trade surplus http://link.reuters.com/weh97r
GDP of G3 economies http://link.reuters.com/dac97r
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YIELD SUPPORT FOR DOLLAR
The euro <EUR=> fell to a three-week low of $1.3461, while
the dollar <.DXY> rose 0.15 percent against a basket of major
currencies.
The dollar has been supported by rising U.S. yields, which
hit their highest in nearly 10 months last week <US10YT=RR>.
"As long as U.S. yields hold current high levels it is hard
to oppose dollar gains," Lloyds TSB said in a note to clients.
"But it is questionable how sustainable the current level of
US yields is with a dovish (Federal Reserve) stance, and the
dollar typically struggles to find much traction in a 'risk on'
world."
The bund futures <FGBLc1> were steady on the day ahead of a
bond auction by Italy.
Analysts expect the sale to go smoothly despite a resurgence
of concerns about the debt loads of a number of euro zone
economies after prices for the bond Portugal placed in a
syndicated sale last week fell in the secondary market.
European finance ministers will discuss on Monday how to
give their euro zone rescue fund more flexibility and firepower
and how to tackle debt crises after 2013, but final decisions
are unlikely before March [].
(Additional reporting by Joanne Frearson; editing by Patrick
Graham)
