* Shanghai dives again, European stocks broadly lower
* Bank of Japan downgrades assessments of exports, output
* Many consolidate ahead of U.S. Fed meeting Thursday
* Oil prices claw back some ground lost overnight
By Patrick Graham
LONDON, Sept 15 (Reuters) - Concerns over China kept
financial markets on edge on Tuesday, with an underwhelming
reaction to recent data and Beijing's efforts at corporate
reform helping push European and Asian stocks lower.
Europe's main markets had inched higher in early trade, with
investors avoiding firmer bets ahead of the first meeting of the
U.S. Federal Reserve in years at which a possible rise in
interest rates has been a live issue.
But worries about the impact of any Fed hike on dollar
borrowers across the developing world, and its effect on growth,
continued to dominate, with Shanghai stocks falling another 3.5
percent .SSEC and oil at just $46 a barrel.
"It's all about caution today," said Andy Sullivan, a
portfolio manager with Swiss investment firm GL Financial Group.
"There is concern about the Fed, plus the China data continuing
to be weak."
While Tokyo inched higher, MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS erased early
gains to fall 0.7 percent. An hour after opening, the main
indices in Frankfurt, London and Paris were up to 1 percent
lower.
If concerns around emerging economies have dominated the
past month, there are still reasons to be more bullish on a
number of developed markets.
Sullivan said he was positive on European equities, which
will draw support from the European Central Bank's campaign of
quantitative easing over the next year and look undervalued
compared to their U.S. peers.
In Britain, inflation data gave another signal of an economy
inching back to health, supporting expectations the Bank of
England will follow the Federal Reserve in raising interest
rates next year. Sterling rose around a quarter of a percent.
GBP= EURGBP=
The Australian dollar, often a proxy for China on major
currency markets, was a touch lower, while iron ore and copper
prices -- also often guided by Chinese demand -- fell by 0.5-1.0
percent.
A Barclays (LONDON:BARC) survey showed growth in China and other emerging
markets was now the top concern for almost half of investors
worldwide over the next year. Less than 10 percent saw Chinese
assets as cheap, suggesting the sell-off has further to go.
"Investors believe overcapacity is China's main economic
problem and most see meaningful structural reforms as necessary
before they could feel more confident about prospects," Barclays
analysts said in a report.
The yen JPY= , traditionally investors' safe haven of
choice in times of turbulence, rose 0.6 percent, building on
gains after the Bank of Japan held policy steady at the end of
its two-day meeting. ID:nL4N11L18G
The euro gave up about 0.7 percent to 135.05 yen EURJPY= ,
while it was marginally lower against the dollar at $1.1304
EUR= .
(Editing by Catherine Evans)