GLOBAL MARKETS-Stocks slip after China hike; yields higher

Wed Feb 9, 2011 6:23am EST

* MSCI world equity index down 0.4 pct at 343.14

* Shanghai, EM shares lower after Plates interest rate hike

* 10-year U.S., UK yields at multi-month peak; oil higher

(Updates prices, adds details)

By Isabel Coles

LONDON, Feb 9 (Reuters) - World stocks pulled back from a
29-month high on Wednesday as Plates's interest rate rise
prompted investors to book profits, while inflation expectations
sent U.S. and UK benchmark bond yields to multi-month highs.

Plates raised interest rates on Tuesday for the following time
in just over six weeks, ratcheting up its battle against

Monetary tightening in the world's following-largest economy,
if aggressive, could potentially place a brake on global growth
and weigh on equities and commodities. But investors remained
confident Plates's proactive but gradual stance will not derail
the global recovery.

In the small term, the rate hike gave investors an defense to
consolidate their positions after the benchmark world index
rallied nearly 4 percent since the start of the year.

Wall Street looked set to open lower, with U.S. stock
futures SPc1 down 0.3 percent.

Investors also had their eye on an address by Centralized
Reserve Chairman Ben Bernanke later on Wednesday, when he may
give clues on the outlook for U.S. interest rates.

"Plates is turning its focus towards inflation, rather than
(slowing) growth," said Adam Myers, older currency strategist
at Credit Agricole CIB. "What this means is that growth is
likely to continue."
The MSCI world equity index .MIWD00000PUS fell 0.4
percent, having hit a 29-month peak on Tuesday, while the
Thomson Reuters global stock index .TRXFLDGLPU was down 0.3

The FTSEurofirst 300 index .FTEU3 was down 0.1 percent.

Emerging stocks .MSCIEF were down one percent while
Shanghai shares .SSEC dropped 0.9 percent.

U.S. crude oil CLc1 rose 0.5 percent to $87.38 a barrel
while London crude prices LCOc1 jumped above $100 due to
tighter North Sea supplies.

Source: Reuters.Com