GLOBAL MARKETS-Oil slips below $48 barrel, global stocks waver

                                
 * Global stocks slip on energy shares, caution before Fed
                                
 * Euro gains, above $1.31 for the first time since January
                                
 * Government debt rises, lower stocks spur safe-haven bid
                                
 * Oil falls as U.S. crude stocks increase double forecasts
 (Recasts with U.S. markets, changes dateline; previous
LONDON)
                                
 By Herbert Lash
                                
 NEW YORK, March 18 (Reuters) - Oil slipped below $48 a
barrel on Wednesday on a fresh build in U.S. crude oil stocks
and after the World Bank cut its growth forecast for China,
while world stocks wavered before a Federal Reserve
announcement.
                                
 The euro rose to a 7-week high against the U.S. dollar at
one point after official data showed British jobless benefit
claims rose by the largest amount on record in February and
risk aversion eased in currency markets.
                                
 But U.S. Treasury debt prices rose in thin trading volume
as sliding U.S. stocks fueled safe-haven buying while investors
wait for a Fed policy statement in the afternoon.
                                
 Bond market analysts are anxious to know whether the U.S.
central bank, at the conclusion of its two-day policy meeting,
will address the possibility of buying longer-dated Treasuries
in an effort to lower long-term U.S. interest rates.
                                
 Investors are aware the Fed may not announce any concrete
steps even though Japan's central bank moved to push money into
the country's moribund economy. The Fed is widely expected to
vow to do whatever it takes to return the U.S. economy to
health. For details, see [ID:n16520160]
                                
 U.S. stocks fell as lower oil hurt energy shares and as
caution before the Fed statement offset optimism from a report
that International Business Machines Corp <IBM.N> was in talks
to buy Sun Microsystems <JAVA.O> for at least $6.5 billion.
                                
 "While we had a nice up-day yesterday, I think it's pretty
clear that some level of giveback has to be undergone," said
Dan Greenhaus, market analyst at Miller Tabak & Co in New York,
referring to a run-up after a drop to 12-year lows earlier this
month.
                                
 Exxon Mobil <XOM.N> was the second-biggest drag on the Dow
behind IBM, falling 2.3 percent as U.S. crude prices fell about
2.5 percent. IBM shares fell 2.6 percent.
                                
 "These days every M&A deal is encouraging, but again IBM is
an incredibly strong company and Sun Micro is an incredibly
weak company," Greenhaus said.
                                
 Before 1 p.m., the Dow Jones industrial average <.DJI> was
down 75.11 points, or 1.02 percent, at 7,320.59. The Standard &
Poor's 500 Index <.SPX> was down 3.87 points, or 0.50 percent,
at 774.25. The Nasdaq Composite Index <.IXIC> was up 3.63
points, or 0.25 percent, at 1,465.74.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
provisionally closed 0.8 percent lower at 710.08 points.
                                
 The euro's rise also was helped by a recent rally in global
stock markets, which had undermined the greenback's safe-haven
appeal.
                                
 "It's ultimately a continuation of the improvement in risk
assets and stocks and this is seeing the the dollar weaken as
the safe-haven demand falls off," said Brian Dolan, chief
currency strategist at Forex.com, in Bedminster, New Jersey.
                                
 The euro <EUR=> was up 0.83 percent at $1.312.
                                
 The dollar was down against a basket of major currencies,
with the U.S. Dollar Index <.DXY> down 0.49 percent at 86.376.
Against the yen, the dollar <JPY=> fell 0.68 percent at 97.93.
                                
 The U.S. Energy Information Administration (EIA) said crude
oil stocks rose 2.0 million barrels to 353.3 million last week
[ID:nEIA000023], double a forecast of a 1 million barrel rise,
according to a Reuters poll.
                                
 Meanwhile, the World Bank lowered its forecast for China's
2009 economic growth but warned Beijing that it would be
thwarting its own medium-term goals if it tried to offset the
slowdown by further boosting investment.
                                
 The World Bank cut its projection of gross domestic product
growth this year to 6.5 percent from a 7.5 percent outcome it
had forecast in November. It said there were both upward and
downward risks to its outlook.
                                
 U.S. light sweet crude oil <CLc1> fell $1.21 to $47.95 a
barrel.
                                
 Treasuries gained as investors pulled out of higher-risk
stocks and moved into the perceived lower-risk of government
debt.
                                
 "The weakness in equities has been sparking a bid (in
Treasuries)," said John Canavan, analyst with Stone & McCarthy
Research Associates in Princeton, New Jersey.
                                
 The benchmark 10-year U.S. Treasury note <US10YT=RR> rose
16/32 in price to yield 2.96 percent. The 2-year U.S. Treasury
note <US2YT=RR> gained 3/32 in price to yield 0.98 percent.
                                
 Gold extended losses to fall more than 2 percent as the
appetite for risk improved, denting gold's appeal as a haven,
and after the release of "benign" U.S. February inflation
data.
                                
 Spot gold prices <XAU=> fell $26.15 to $888.05 an ounce.
                                
 The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> inched up 0.7 percent, while Japan's Nikkei
<.N225> closed 0.3 percent higher, posting a five-week high.