* MSCI world equity index up 0.3 pct at 342.63
* China trade data boosting risk appetite; inflation eyed
* Euro hits 3-week low on WestLB woes; oil steadies
By Wanfeng Zhou
NEW YORK/LONDON, Feb 14 (Reuters) - World stocks climbed
towards last week's 30-month high on Monday as talk of
slower-than-expected Chinese inflation eased fears of more
policy tightening, while the euro fell on renewed worries about
Europe's banking sector.
U.S. crude oil <CLc1> erased early losses to stand near $86
a barrel after hitting a 10-week low last week. Gold <XAU=>
prices rose on safe-haven demand amid fears that Egypt's unrest
would spread across the Arab world.
The euro <EUR=EBS> fell to a three-week low of $1.3428 on
trading platform EBS on concerns surrounding the fate of German
lender WestLB. It last traded down 0.6 percent at $1.3459.
German financial regulator BaFin is involved in talks
about the restructuring of WestLB as the bank struggles to come
up with a rescue deal, sources told Reuters. []
"The story highlighted the shaky state of Europe's banks,
which were hit hard by the global credit crisis, bursting real
estate bubbles and a sovereign debt crisis," said Omer Esiner,
chief market analyst at Commonwealth Foreign Exchange in
Washington.
Weakness in the euro helped pushed the U.S. dollar index,
which measures the greenback versus a basket of major
currencies, to a three-week high of 78.873 <.DXY>,.
Financial markets showed little reaction to President
Barack Obama's budget proposal to cut the U.S. deficit by $1.1
trillion over 10 years. See []
The MSCI world equity index <.MIWD00000PUS> rose 0.3
percent, having hit its highest level since August 2008 last
week. Thomson Reuters' global stock index <.TRXFLDGLPU> gained
0.4 percent.
U.S. stocks <.SPX> U.S. stocks opened flat on Monday after
posting two straight weeks of gains that drove indexes to new
multi-year highs.
The FTSEurofirst 300 index <> rose 0.4 percent to hit
a 29-month peak.
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. []
CHINESE DATA
Traders said that China's consumer prices may have risen as
little as 4.9 percent in the year to January, the lowest of 26
forecasts in a Reuters poll which gave a median prediction of a
5.3 percent rise. The official data will be announced on
Tuesday. <ECONCN> []
This eased concerns that China's central bank would have to
raise interest rates aggressively, which could slow down
growth.
Optimism about the Chinese economic outlook also grew after
data showed the country's trade surplus fell to its lowest in
nine months in January when imports surged, underscoring robust
domestic demand. Solid export growth also hinted at
solidifying recoveries in the U.S. and European economies.
"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."
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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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Emerging stocks <.MSCIEF> added 1.2 percent measured by the
Morgan Stanley Capital index. Shanghai stocks <> hit an
eight-week high, scoring the index's biggest single-day
percentage gain since mid-December.
U.S. Treasury prices slipped though benchmark yields
remained below their recent highs as investors awaited data
later in the week to gauge the state of the economy and how far
yields may need to rise to account for growth.
(Additional reporting by Natsuko Waki in London)
