* MSCI world equity index down 0.8 pct at 212.10
* European stocks, currencies fall after euro zone data
* Government bonds rises; oil slips
By Natsuko Waki
LONDON, April 7 (Reuters) - World stocks turned lower and
European currencies fell on Tuesday after data showed the euro
zone economy shrank more than previously thought, fanning
concerns about the impact on corporate profits.
Gross domestic product in the euro area contracted 1.6
percent in the fourth quarter from the previous three months,
rather than the previously reported 1.5 percent.
UK manufacturing output fell 0.9 percent in February, less
than expected but marking the 12th straight month of declines,
the longest stretch of losses since early 1980s.
World stocks, measured by MSCI <.MIWD00000PUS>, slipped
after a month-long run pushed them to a two-month high on
Monday.
The drop in the euro zone GDP is the deepest ever quarterly
fall and was brought on by a collapse in external trade, fanning
concerns about the impact on corporate profits just as a U.S.
corporate earnings season kicks off later on Tuesday.
"Worryingly, it is far from inconceivable that euro zone GDP
contraction was even deeper in the first quarter... given
largely dire data and survey evidence," said Howard Archer,
chief European economist at IHS Global Insight.
"This will hopefully have marked the low point in the
downturn, although recovery currently still looks some way
away."
The MSCI equity index fell 0.8 percent while the
FTSEurofirst 300 index <> lost 1.1 percent. Emerging
stocks <.MSCIEF> dropped 1 percent.
U.S. stock futures were down by around 1.5 percent <SPc1>,
pointing to a weaker start on Wall Street.
U.S. crude oil <CLc1> erased early gains, falling 1.7
percent to $50.19 a barrel.
The June Bund futures <FGBLc1> rose 14 ticks.
The euro fell 1.1 percent to $1.3239 <EUR=>, hitting session
lows after the data, while sterling lost 0.7 percent to $1.4638
<GBP=>.
The yen rose 1 percent to 100.07 per dollar <JPY=>.
Earlier, the Bank of Japan left interest rates on hold at
0.1 percent and unveiled plans to lend against a wider range of
municipal debt in a move to ease a domestic credit crunch.
Japan is also set to announce a new economic stimulus
package worth more than 2 percent of GDP this week as the
country grapples with its worst recession since World War Two.
The new package will add around $100 billion to spending
already planned under previous measures.
The dollar <.DXY> rose 0.8 percent against a basket of major
currencies.
"Data is meagre and FX markets are trading in the wake of
stock markets, which is likely to continue going into the long
weekend," said Frankfurt-based Commerzbank currency strategist
Antje Praefcke.
(Additional reporting by Jessica Mortimer; editing by
Stephen Nisbet)
