* World stocks slip from fresh 30-month highs
* China raises bank reserve requirements
* Middle East tensions boost oil; gold near 5-week high
(Recasts, updates prices, adds details, comment)
By Wanfeng Zhou
NEW YORK, Feb 18 (Reuters) - World stocks came off early
highs on Friday after China raised bank required reserves to a
record to battle inflation, while oil prices climbed on
concerns unrest in the Middle East and North Africa could
disrupt supplies.
The MSCI all-country world stock index <.MIWD00000PUS> was
0.2 percent higher after earlier hitting a fresh 30-month high.
U.S. stocks were little changed after recent advances pushed
indexes to more than 30-month highs wit Wall Street eyeing a
third week of gains.
The Dow Jones industrial average <> was up 25.04
points, or 0.21 percent, at 12,344.88. The Standard & Poor's
500 Index <.SPX> was up 1.13 points, or 0.08 percent, at
1,341.56. The Nasdaq Composite Index <> was up 3.52
points, or 0.12 percent, at 2,835.08.
China raised banks' required reserves half a percentage
point on Friday to 19.5 percent for the biggest banks, the
second such increase this year as government 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.
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.
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.
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.
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 U.S. 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
U.S. March light crude futures rose 90 cents to 87.26 a
barrel <CLc1>. Brent crude futures <LCOc1> were flat at $102.55
a barrel in volatile trading.
Oil prices -- and their impact on global inflation --
remained in focus as protesters in Bahrain and Libya bury
people killed in recent clashes. []
At least two people were killed in Yemen on Friday when
clashes broke out between police and protesters, witnesses
said, and thousands turned out in Bahrain and Libya to mourn
protesters killed in government crackdowns. []
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". []
Unrest in the Middle East kept gold close to a five-week
high and silver near its strongest since 1980. Spot gold <XAU=>
last traded at $1,386.24.
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)
