* World stocks linger near recent highs
* Euro rallies vs U.S. dollar, Aussie dollar
* Copper, tin recoup from China's move, oil tumbles
* U.S. stocks rise in 2011's quietest day of trade
(Updates to U.S. market close)
By Alina Selyukh
NEW YORK, Feb 8 (Reuters) - World stocks and industrial
metals managed to claw their way slightly higher while oil
prices fell in volatile trade on Tuesday after China raised
interest rates for the second time in six weeks, spurring
worries that global growth will be crimped.
As commodities took the initial hit from China's move, the
commodity-sensitive Australian dollar fell and bolstered the
euro, which rallied broadly on demand from Asian central banks.
The U.S. dollar and Swiss franc eased across the board as
investors ventured away from safe-haven currencies after
tensions in Egypt eased.
In an intensifying bid to tame high inflation, China said
it would raise its benchmark one-year deposit rate by 25 basis
points to 3 percent.
China is the world's biggest consumer of copper, an
industrial metal often viewed as a barometer for economic
conditions, and the world's second-biggest consumer of energy.
Copper, mirrored by tin, tumbled on the news initially but
bounced to a slightly firmer finish with demand remaining
robust for this year. The metal has been reaching successive
record highs since the beginning of February. []
The impact from China's rate hike on other asset classes
was limited.
"The rate hike is important, but it isn't at a critical
level where it becomes troublesome," said Michael Mullaney, a
portfolio manager who helps manage $9.5 billion at Fiduciary
Trust Co in Boston.
Global stocks coasted, with major averages lingering near
2-1/2-year highs. Wall Street rose on the thinnest volume this
year as gains in consumer discretionary stocks offset losses in
energy shares and lifted the Dow to the seventh consecutive day
of gains.
Asian markets were set for a higher open as the front month
futures contract for the Nikkei 225 stock index <0#NK:> trading
in Chicago rose 30 points, or 0.28 percent, to 10,695. Asian
markets will reopen on Wednesday after week-long Lunar New Year
holidays.
China's reminder about inflationary worries around the
world supported gold, which rose and pushed through resistance
levels. At the U.S. market close, however, spot gold <XAU=>
trimmed its gains, edging down 0.1 percent, or 96 cents, to
$1362.60.
U.S. crude oil <CLc1> fell 38 cents, or 0.43 percent, to
$87.10 per barrel. In addition to the Chinese rate hike,
expectations that weekly oil inventory reports from industry
and government will show crude stockpiles rose last week
weighed on prices.
The U.S. dollar fell 0.09 percent against a basket of major
trading-partner currencies <.DXY> and edged down 0.02 percent
against the Japanese yen <JPY=>.
The euro <EUR=> held little-changed from the previous
session close at $1.3631 after climbing as high as $1.3685
earlier in the day.
SUBDUED MARKETS
After weeks of growth in world stock markets, investors
remained focused on corporate earnings and growing merger
activity, tempering the sting from the Chinese rate hike.
U.S. stocks rose after McDonald's Corp <MCD.N>, a Dow
component and a barometer for consumer spending, reported
surprisingly better-than-expected sales and boosted consumer
discretionary stocks. []
At the close, the Dow Jones industrial average <> rose
71.52 points, or 0.59 percent, to 12,233.15. The Standard &
Poor's 500 Index <.SPX> gained 5.52 points, or 0.42 percent, to
1,324.57. The Nasdaq Composite Index <> added 13.06
points, or 0.47 percent, to 2,797.05.
The MSCI world equity index <.MIWD00000PUS> rose 0.4
percent, hovering at the highest level since August 2008. The
Thomson Reuters global stock index <.TRXFLDGLPU> gained 0.3
percent, while emerging stocks <.MSCIEF> were little changed,
down 0.1 percent.
Europe's FTSEurofirst 300 index <> closed 0.1 percent
lower, retreating slightly from 29-month highs hit on Monday,
Mining stocks fell, with Kazakhmys <KAZ.L>, Lonmin <LMI.L> and
Vedanta <VED.L> all down 1 percent.
Worries of growing global inflation also pressured U.S.
Treasury debt prices, which weakened for a seventh day in a
row. Prices also sagged in the wake of a soft three-year note
sale as traders bet that government debt yields may need to
rise further to adapt to a strengthening economy.
With yields at their highest levels since last spring, the
benchmark 10-year note <US10YT=RR> fell 24/32 to yield 3.74
percent, near a 4 percent resistance level. The 2-year Treasury
note <US2YT=RR> shed 6/32, yielding 0.85 percent.
(Additional reporting by Ryan Vlastelica, Chris Kelly, Karen
Brettell and Gertrude Chavez-Dreyfuss in New York and Brian
Gorman and Melanie Burton in London; editing by Andrea Ricci,
Leslie Adler and Dan Grebler)
