* China inflation, European growth keep stocks higher
* World stocks near 30-month highs
* Euro zone periphery concerns hold back euro
By Jeremy Gaunt, European Investment Correspondent
LONDON, Feb 15 (Reuters) - Chinese inflation data helped
ease investor concerns on Tuesday that the world's No 2 economy
will have to tighten monetary policy more aggressively, while
steady, if disappointing, European growth figures kept stocks
buoyant.
Wall Street looked set for modest gains at the open.
The dollar was weaker against a basket of major currencies
<.DXY>, and the euro rose despite worries about euro zone debt
rising up again.
World stocks as measured by MSCI <.MIWD00000PUS> were up 0.2
percent, not far from last week's 30-month highs. Japan's Nikkei
<> logged a 10-month closing high and Europe's FTSEurofirst
300 <> was up 0.1 percent.
Data showed that the euro zone economy ended last year with
stable growth, but it failed to meet expectations for an
acceleration as expansion in the three largest nations fell
short of forecasts and Greece and Portugal contracted.
Countering this, German analyst and investor sentiment rose
slightly in February amid confidence in Germany's economic
recovery, a survey by the ZEW economic think tank showed.
"As we all know there was a cold snap in December, which
disrupted construction and trade activity, and the acceleration
in industrial activity was insufficient to offset this, so the
underlying picture looks more benign," said Martin van Vliet at
ING.
China's inflation was lower than expected at 4.9 percent in
the year to January.
Although price pressures continued to build and will force
the central bank to stick to its course of gradual monetary
tightening, the report took the edge off concern about firmer
action. []
"The data probably slightly eased expectations of immediate
tightening, although in the overall scheme of things, this
doesn't change the fact that China is still in a tightening
phase," said Etsuko Yamashita, chief economist at SMBC.
Inflation pressures, particularly in emerging markets, have
been part of the motivation this year for investors to move into
developed stock markets.
A number of those countries are also having problems,
however, particularly Britain, which came in at an annual 4.0
percent. U.S. consumer price data, meanwhile, will be reported
on Thursday.
EURO PERIPHERY
The euro gained on higher demand from Middle East and Asian
investors, but it was undermined by scepticism over how euro
zone leaders would come up with a quick and effective solution
to tackle its debt crisis.
Peripheral euro zone yield spreads have been widening in the
past week on uncertainty over a rescue package for the region,
and there was some disappointment after a meeting of European
finance ministers on Monday.
"Initial optimism at the beginning of the year over a
comprehensive bailout package in the euro zone is now starting
to fade away," said Lee Hardman, currency strategist at BTM UFJ.
The euro <EUR=> was up 0.3 percent at $1.3534, not far from
a three-week low of $1.3428 hit on Monday.
The 10-year German bond yield <DE10YT=TWEB> was up 3 basis
point at 3.32 percent, while the two-year yield <DE2YT=TWEB>
rose 2 basis points to 1.44 percent.
(Additional reporting by Neal Armstrong; editing by Patrick
Graham)
