* MSCI world equity index down 0.4 pct
* Wall Street set for mild losses
* Shares off 2009 highs, dollar above 15-month lows
* Oil, gold slip after rally; govt bonds firmer
By Natsuko Waki
LONDON, Nov 17 (Reuters) - World stocks slipped on Tuesday
from the previous day's 2009 high and oil and gold fell as
investors locked in gains from a strong rally.
Wall Street looked set for modest losses at the open and the
dollar edged higher from its 15-month lows.
Expectations that the Federal Reserve would keep interest
rates near zero for some time had been weighing on the dollar,
fuelling gains in dollar-priced raw materials and related
commodity shares.
On Tuesday, investors stepped back from risk trades, mindful
that a period of consolidation was probable given that world
stocks, measured by MSCI <.MIWD00000PUS>, rallied around 75
percent from their March troughs.
"Despite the fundamentals remaining upbeat, a degree of
consolidation is likely ... as equity traders pause for breath,"
IG Markets analyst Ben Potter noted.
"There is however little to suggest that this will turn into
any full-blown bout of profit taking ... The overall view seems
to remain that with the economic recovery underway and
government stimulus attempts ongoing, there are few reasons out
there to be avoiding stocks."
MSCI world equity index <.MIWD00000PUS> fell 0.4 percent,
having hit its highest since September 2008 on Monday.
The FTSEurofirst 300 index <> fell 0.3 percent, after
hitting a 13-month high in the previous session.
Emerging stocks market <.MSCIEF> fell 0.4 percent.
U.S. crude oil <CLc1> fell more than half a percent to
$78.28 a barrel, while gold <XAU=> lost more than three quarters
of a percent to around $1,129 per ounce after hitting record
highs above $1,143 on Monday.
FED AND DOLLAR
The dollar <.DXY> rose 0.7 percent against a basket of major
currencies, just above Monday's 15-month lows.
Fed chairman Ben Bernanke, in a rare comment on the U.S.
dollar's value, acknowledged the currency's slump was causing
some prices to rise, although other factors were restraining
inflation. []
He also said tight credit and a weak job market would weigh
on the economy's recovery, repeating the Fed's pledge to keep
interest rates exceptionally low for an extended period.
"The Chairman's rhetoric signals that the dollar decline is
well on the radar of the Fed and U.S. authorities may be more
prone to acquiesce to stronger rhetoric opposing dollar
weakness. This is something to watch at forthcoming G7, G20, etc
meetings," Citi said in a note to clients.
"While verbal support may moderate the pace of dollar
decline, it is unlikely to affect a structural trend that
reflects well-entrenched fundamentals. In addition, current
dollar short positioning is not particularly stretched and
investors may continue to look to sell on rallies."
The Bund future <FGBLc1> gained 11 ticks, underpinned by
cautious comments from European Central Bank officials who have
stressed a slow and steady exit policy from their extraordinary
stimulus measures.
(Editing by Mike Peacock)
