* UK PMIs show post-Brexit plunge
* Stocks rally loses steam
* G20 meet in China
By Jamie McGeever
LONDON, July 22 (Reuters) - Shares fell on Friday after soft U.S. corporate results pulled Wall Street back from record highs, and sterling slumped as the first snapshot of the UK economy since the vote last month to leave the European Union painted a bleak picture.
European stocks and MSCI's leading global share index were both on course for their first consecutive daily losses in two weeks, while Japan's Nikkei posted its biggest decline over the same period.
U.S. stock futures pointed to a slightly higher open on Friday ESc1 .
British purchasing managers data showed manufacturing and services activity plunged in July, a fall consistent with a broader 0.4 percent economic contraction in the third quarter and raising the probability of recession.
"It wasn't exactly a big surprise to see confidence in both sectors take a hit, but what was a concern was the size of the hit to the services sector, the main engine of growth for the UK economy," said Craig Erlam, senior market analyst at Oanda.
"If we continue to see these kinds of figures in the coming months, the economy could be headed for recession before the year is out," he said.
The pound fell nearly two cents to $1.31 GBP= , back to within a couple of cents of the 31-year low struck earlier this month following the June 23 EU referendum.
The weaker exchange rate lifted UK stocks up into positive territory and within sight of last week's 11-month high. The FTSE 100 index, which derives most of its earnings from abroad, rose 0.4 percent to 6,727 points.
Europe's FTSEuroFirst index of leading 300 shares .FTEU3 trimmed earlier losses and was last down just 0.1 percent, while Germany's DAX .GDAXI was flat on the day and France's CAC 40 .FCHI was up 0.2 percent.
Euro zone private sector growth slowed in July to its weakest in 15 months, according to the euro zone PMI data. seen the 'Duracell bunny' momentum of the market finally wind down this week, with European and UK exchanges just running out of steam despite fresh record highs in the U.S.," said Chris Beauchamp, senior analyst at IG.
Intel INTC.O , the world's largest chipmaker, led Wall Street lower on Thursday after it reported slower revenue growth at its data centre business. U.S. stocks are expected to open little changed on Friday.
G20 IN CHINA
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.5 percent, having hit a nine-month high on Thursday.
Japan's Nikkei .N225 closed down 1.1 percent, dragged down by the yen's 1 percent rally on Thursday. The index is still up 0.8 percent in a week in which it touched an eight-week high thanks to an initially weaker yen and expectations of fiscal and monetary stimulus.
"Pretty much everything is on the table when it comes to the next BOJ monetary policy decision on 29 July ... except for outright helicopter money," Frederic Neumann, co-head of Asian economic research at HSBC in Hong Kong, wrote in a note on Friday. "The case for more easing is evident."
G20 finance ministers and central bank governors meet this weekend in Chengdu, China. While Japan and Britain signalled they may be prepared to give a fiscal boost to their respective economies, U.S. Treasury Secretary Jack Lew said he saw little need for the same type of massive coordinated fiscal stimulus efforts used to combat recession in 2008-2009. yen relinquished earlier gains, and the dollar was last up around 0.3 percent at 106.15 yen JPY= .
The dollar index was up 0.15 percent at 97.145 .DXY , closing in on the four-month peak of 97.323 struck on Wednesday as traders once again put money back on the Federal Reserve raising interest rates this year.
The euro was down slightly at $1.1015 EUR= . As widely anticipated, the ECB stood pat on monetary policy on Thursday. But the bank kept the door open to more policy stimulus, citing uncertainty and risks to the region's economic outlook. 10-year U.S. Treasury yields rose over a basis point but on course for a slight fall on the week, easing back after chalking up the biggest rise in over a year the previous week.
German bond yields were flat at -0.1 percent EU10YT=RR , still on track for a fall on the week but up from earlier lows on the back of the surprisingly upbeat German PMI data.
In commodities, crude futures bounced back from overnight falls after data pointed to record U.S. stockpiles of gasoline and other oil products. Brent crude LCOc1 rose 0.5 percent to $46.44 a barrel and U.S. crude CLc1 rose 0.3 percent to $44.91 a barrel. Both contracts are poised for a fall of more than 2 percent on the week.
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https://t.co/YqIYLIbInP Chinese A-shares vs developed and emerging stocks
http://link.reuters.com/rac25w
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