* MSCI world equity index down 0.4 pct
* U.S. growth worries weigh on shares, U.S. dollar
* Dollar stays weak, near 15-year low vs yen
By Jessica Mortimer
LONDON, Aug 4 (Reuters) - Global shares fell and the dollar
headed towards a 15-year low against the yen on Wednesday on
growing concern about the U.S. economy as recent data has
sparked talk of more monetary easing by the Federal Reserve.
Data on Tuesday showed U.S. home purchase contracts tumbled
to a record low in June, while factory orders fell more steeply
than expected, implying an anaemic economic recovery for the
remainder of this year. []
U.S. concerns encouraged stock market participants to take
profit, even as earnings releases from the likes of Lloyds
Banking Group <LLOY.L> and Societe Generale <SOGN.PA> again
revealed a healthy banking sector.
The MSCI world equity index <.MIWD00000PUS> fell 0.4
percent, while European shares lost ground, with the
FTSEurofirst 300 index <> down 0.7 percent.
"Economic data in the U.S. has been pointing towards a
slowing economy and while earnings have been better than
expected, there are worries about the future. It is not the full
support the market needs," said Bernard McAlinden, investment
strategist at NCB Stockbrokers, in Dublin.
Weak U.S. data has fanned market speculation that the U.S.
Federal Reserve could further relax policy, perhaps at its Aug.
10 meeting, weighing heavily on the U.S. dollar and pushing down
U.S. Treasury yields.
The dollar fell to an eight-month low versus the Japanese
yen <JPY=> of 85.32 yen, opening up the path towards 15-year
lows below 84.82 yen.
Against a basket of major currencies <.DXY>, the dollar was
up 0.1 percent, but stayed close to a three-and-a-half-month low
hit on Tuesday.
DATA AHEAD
Mounting concern about the U.S. economy and persistent
Japanese deflation, reinforced by a rising yen, sent 10-year
Japanese government bond yields to a seven-year low below 1.0
percent.
Japan's Nikkei stock index <> fell 2.1 percent on
Wednesday on worries the yen's strength could undermine Japanese
exports. Prime Minister Naoto Kan said it may be necessary to
consider new stimulus steps for Japan's economy while a Bank of
Japan policymaker said he was watching the yen closely.
[]
The drop in Japanese government bond yields and U.S. growth
worries pushed European bond prices higher, with the September
Bund futures <FGBLc1> up 18 ticks at 129.24, while the two-year
U.S. Treasury note yield <US2YT=RR> hovered just above a record
low of 0.526 percent set on Tuesday.
Investors will be watching for U.S. ADP national employment
data later in the day for clues on how key U.S. non-farm
payrolls figures will look on Friday, while the Institute for
Supply Management's July non-manufacturing index is also due.
<ECON>
"At a time when it seems that any news is bad news for the
greenback, today's data will not help much," analysts at Brown
Brothers Harriman said in a note.
Renewed market aversion to taking on risk also helped gold
prices <XAU=> rally to their highest in more than a week, with
China's decision to allow banks to hedge bullion positions in
overseas markets also lifting the metal.
Oil fell for the first day in five as a rally that powered
prices to three-month highs near $83 on Tuesday lost steam. U.S.
crude oil <CLc1> fell 75 cents to $81.81.
Emerging stocks <.MSCIEF> fell 0.1 percent.
(Additional reporting by Joanne Frearson; Editing by Susan
Fenton)
