* China imports plunge 20 pct
* Oil recovers from 5 pct slide
* Shares snap longest upswing since Feb
By Jamie McGeever
LONDON, Oct 13 (Reuters) - World share prices fell on
Tuesday, snapping their longest winning streak since February
after Chinese trade data gave a further sign the world's
economic growth engine is sputtering and a big fall in oil
prices triggered profit-taking.
Chinese imports plunged 20 percent in September, casting
doubt on the strength of domestic demand in the economy, while
oil fell more than 5 percent overnight after a report that OPEC
continued to boost production.
Those factors overshadowed a bumper corporate merger deal,
which saw the world's largest brewer Anheuser-Busch InBev
ABI.BR take over SABMiller SAB.L in a cash and share package
worth 68 billion pounds ($104.4 billion).
Bond yields and emerging market currencies fell too, while
dimming prospects of a U.S. interest rate hike this year pushed
the dollar lower and lifted the euro above $1.14 for the first
time in a month.
"Many countries ... rely heavily on sales to China so unless
this demand picks up in the coming quarters, not only are we
going to see below 7 percent growth in the world's
second-largest economy, it's going to decline sharply for many
of its trade partners as well," said Craig Erlam, senior market
analyst at Oanda in London.
The MSCI world share index fell 0.5 percent .MIWD00000PUS ,
its first fall in 10 sessions, ending the longest winning streak
since February.
The FTSEuroFirst 300 index of leading European shares was
down 1.4 percent at 1,409 points .FTEU3 , Germany's DAX was
down 1.5 percent .GDAXI , France's CAC 40 was down 1.9 percent
.FCHI and Britain's FTSE 100 was down 0.9 percent .FTSE .
The ZEW survey for October from Germany, which will capture
investor sentiment following recent market volatility and the
U.S. Federal Reserve's decision to stand pat on rates, could
give European markets direction later on Tuesday.
In Asia earlier, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS fell 1 percent from a
two-month high touched on Monday, while Japan's Nikkei .N225
fell 1.1 percent.
Futures markets pointed to a fall of around 0.5 percent at
the open on Wall Street ESc1 .
THE DOLLAR YIELDS
China's trade data for September showed a 3.7 percent fall
in exports from the same period last year, less than the 6.3
percent drop forecast by economists in a Reuters poll. Imports,
however, tumbled 20.4 percent. ID:nL3N12D1DA
The weakening economy prompted China's central bank on
Monday to expand a scheme that increases banks' ability to lend,
lifting mainland Chinese shares to seven-week highs.
ID:nL3N12C30P
On Tuesday, Shanghai shares .SSEC edged up around 0.2
percent. It was the index's fifth straight gain, a run not seen
since July.
Oil prices recorded their biggest fall in six weeks on
Monday after a report that OPEC continued to boost crude
production triggered a wave of profit-taking from last week's
11-week high. O/R
Crude prices recovered some of that ground on Tuesday, with
Brent futures LCOc1 up 1 percent in early European trade to
$50.37 per barrel.
The soft Chinese data and oil price weakness overnight were
reminders that inflation is not a problem, which fed into the
view that the Fed is in no hurry to raise rates.
Fed Governor Lael Brainard reinforced such expectations,
saying late on Monday the Fed should hold off on any interest
rate hike until it is clear that a global slowdown, difficulties
in China, and other international risks will not push the U.S.
recovery off course. ID:nL1N12C0YA
The yields on 10- and 30-year U.S. Treasury bonds fell 5
basis points to 2.04 percent US10YT=RR and 2.87 percent
US30YT=RR , while benchmark German Bund yields were down around
1-2 basis points EU10YT=RR .
The dollar's value against a basket of six major currencies
.DXY dropped to 94.5 on Tuesday, its lowest in almost a month,
and the euro rose 0.5 percent to $1.1410 EUR= .
"The drop in oil prices has taken Treasury yields back down
again, and tightening in the Treasury/Bund spread encourages
euro/dollar to probe the top of the current range - $1.1460 is
the key level ... and a test looks likely," said Societe
Generale currency analysts in a client note on Tuesday.
Commodity-linked currencies also slipped, with the
Australian dollar falling 0.7 percent to $0.7311 AUD=D4 , off a
two-month high of $0.7382 set on Monday.
Emerging market currencies also lost momentum after recent
gains. The Indonesian rupiah IDR= and the Malaysian ringgit
MYR= , big winners last week from broad relief rally in risk
assets, both fell about 1 percent.
(Editing by Catherine Evans; To read Reuters Global Investing
Blog click on http://blogs.reuters.com/globalinvesting; for the
MacroScope Blog click on http://blogs.reuters.com/macroscope;
for Hedge Fund Blog Hub click on
http://blogs.reuters.com/hedgehub)