* World stocks slip from fresh 30-month highs
* China raises bank reserve requirements
* London crude oil fall after China move
(Updates with U.S. markets, changes byline, dateline, previous
LONDON)
By Wanfeng Zhou
NEW YORK, Feb 18 (Reuters) - World stocks came off early
highs and oil retreated on Friday after China raised bank
required reserves to a record, prompting worries that
tightening efforts aimed at battling inflation could slow down
global growth and curb demand for commodities.
U.S. stocks opened little changed after recent advances
pushed indexes to more than 30-month highs and as Wall Street
eyed a third week of gains.
The Dow Jones industrial average <> was up 15.63
points, or 0.12 percent, at 12,333.05. The Standard & Poor's
500 Index <.SPX> dipped 0.11 points, or 0.01 percent, at
1,340.30. The Nasdaq Composite Index <> was up 1.71
points, or 0.07 percent, at 2,833.34.
The MSCI all-country world stock index <.MIWD00000PUS> was
0.2 percent higher after earlier hitting a fresh 30-month
high.
China raised banks' required reserves by 50 basis points on
Friday, the second such increase this year as it continues the
fight against inflation. []
"They have been trying to curb liquidity for some time, so
little surprise and not as bad as a benchmark rate rise, but
still slightly weighing on sentiment," said Andrey Kryuchenkov
from VTB Capital.
Brent crude futures <LCOc1> were $1.16 lower at $101.44 a
barrel, down from earlier highs of $103.5 a barrel. U.S. March
light crude futures, however, traded higher at 87.43 a barrel
<CLc1>.
China has also increased interest rates three times in the
past four months and ordered banks to issue fewer loans. But
its annual inflation still rebounded to 4.9 percent in January
from 4.6 percent a month earlier.
In Paris, China rejected plans to use real exchange rates
and currency reserves to measures global economic imbalances,
casting doubt on the ability of Group of 20 major economic
powers to reach agreement at a meeting on Friday.
European shares <> fell slightly, though still
hovering near 29-month highs, with miners among the worst
performers after China's move to raise banks' reserve
requirements.
Rising inflation, meanwhile, was underlined by German
producer prices for January exceeding forecasts to post their
strongest year-on-year rise since October 2008, up 5.7 percent.
The euro <EUR=> edged higher against the dollar after a
senior European Central Bank official was quoted by a media
report as saying that interest rates could be raised.
OIL IN FOCUS
Oil prices -- and their impact on global inflation --
remained in focus as protesters in Bahrain and Libya bury
people killed in recent clashes. []
In Libya's eastern city of Benghazi early on Friday,
thousands of anti-government protesters crowded on to the
streets, a day after demonstrations led to skirmishes with
security forces in which more than 20 people may have been
killed. []
Tension between Israel and Iran also continued over the
latter's plans to send navy ships through the Suez Canal, a
move that Israel has called a "provocation". []
Sterling <GBP=D4> rose on market talk that another member
of the Bank of England's Monetary Policy Committee had moved
into the hawks' camp by voting for a rate rise in February.
Minutes of the February meeting, at which the bank left
rates on hold at a record low of 0.5 percent despite rising
inflation, are due for release on Wednesday.
Concerns Portugal may need a bailout -- possibly by April
-- dominated euro zone sovereign bond markets, with the yield
on the country's five-year debt hitting a euro-era peak for a
second session running.
(Additional reporting by Jeremy Gaunt and Zaida Espana in
London)
(Editing by Theodore d'Afflisio)
