* European shares rise, oil hovers near 20-month lows
* MSCI world equity index down 0.23 percent at 223.47
* Dollar dips, sterling hits 12-year trade-weighted low
By Carolyn Cohn
LONDON, Nov 12 (Reuters) - European stocks recovered some
ground on Wednesday after steep losses in the previous session
and the dollar dipped, but oil hovered near 20-month lows on
ongoing worries about a slowdown in global demand.
Weak corporate earnings dragged down U.S. stocks and Asian
shares followed, with shares of General Motors <GM.N> sliding to
a 65-year low on Tuesday on mounting worries about whether it
can avoid bankruptcy.
But European mining shares tracked firmer metals prices and
banks advanced after recent losses. Gold <XAU=> rose and
platinum <XPT=> gained more than 3 percent, helped by a weaker
dollar.
The FTSEurofirst 300 <> index of top European shares
rose 0.29 percent to 886.13, after falling more than 4 percent
on Tuesday. The index has lost about 40 percent this year, hit
by the global credit crunch and resulting economic slowdown.
"The markets are still being buffeted by growth concerns,
equity market weakness and risk aversion," said analysts at
Calyon in a client note.
"Whilst perhaps not in the crisis situation of a few weeks
ago, nervousness continues to undermine risk appetite."
World Bank President Robert Zoellick warned global trade may
drop next year for the first time in more than a quarter of a
century as the global credit crisis cuts into trade financing.
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Russia's RTS share index <> fell 7.8 percent, dragged
down by U.S. and Asian markets and falling oil. The more liquid
MICEX index was suspended limit down until Thursday.
U.S. crude oil <CLc1> fell 90 cents a barrel to $58.41,
close to its lowest since March 2007 and down more than $80 from
record peaks hit in July.
The dollar dipped after earlier hitting two-week highs
against the euro <EUR=>, to trade around half a percent lower at
$1.2577. It steadied against the yen at 97.75 <JPY=>.
POUND SLIDES
Sterling hit 12-year lows on a trade-weighted basis <=GBP>
on worries about a UK recession and expectations of further
monetary easing, after a shock 150-basis point UK rate cut last
week.
"Overall, sentiment is negative for sterling as weak data
have intensified recession fears and on expectations of
continued aggressive rate cuts by the Bank of England," said
Commerzbank currency strategist Antje Praefke in Frankfurt.
The Bank of England will release its quarterly inflation
report at 1030 GMT and is expected to slash its growth forecast
and warn that inflation may undershoot its 2 percent target next
year.
Euro zone government bonds were under pressure on the
prospect of absorbing the day's sizeable new issuance.
Germany will offer 7 billion euros of new 10-year Bunds,
with a $25 billion auction of 3-year notes in the U.S. to
follow.
Two-year euro zone government bond yields <EU2YT=RR> were up
3.4 basis points and 10-year yields <EU10YT=RR> were up 1.9.
The MSCI global emerging equities index <.MSCIEF> fell 1.28
percent and emerging sovereign debt spreads widened by 7 basis
points to 599 bps over U.S. Treasuries <11EMJ>.
(Editing by Mike Peacock)
