* MSCI's world equity index falls 0.1%
* European shares turn slightly positive
* Investors doubt U.S. delisting threat will be carried out
* Dollar stands firm
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Tom Wilson
LONDON, Sept 30 (Reuters) - World shares on Monday largely shrugged off reports that Washington is considering delisting Chinese companies from U.S. stock exchanges, with market players downplaying the likelihood of such radical escalation of the U.S.-China trade war.
U.S. President Donald Trump is looking at the move as part of a broader effort to limit U.S. investment in Chinese companies, sources told Reuters on Friday, though it was not clear how any such delisiting would work. MSCI's world equity index .MIWD00000PUS , which tracks shares in 47 countries, was little changed, down 0.1%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS also slipped just 0.1%.
Europe's Euro STOXX 600 .STOXX turned positive, ekeing out a 0.1% gain after opening lower. Markets in Frankfurt .GDAX , Paris .FCHI and London .FTSE were flat.
Wall Street futures gauges NQcv1 suggested that U.S. stocks would bounce back, indicating gains of 0.4%. The concern around the latest Sino-U.S. tensions had caused U.S. stocks to fall on Friday, with the Nasdaq .NDX losing 1%.
The news also knocked Chinese shares listed on U.S. exchanges on Friday. Alibaba (NYSE:BABA) Group BABA.N and JD.com JD.O both lost 5% to 6% on Friday.
China warned on Monday of instability in international markets from any "decoupling" of China and the United States following the reports, noting a U.S. Treasury response that said there were no immediate plans to block Chinese listings. players said equity markets thought the threat of delisting was just a tactic before U.S.-China trade talks resume next week. Investors are accustomed to belligerence from Trump before he dials down his rhetoric, said Luca Paolini, chief strategist at Pictet Asset Management.
"It's a strategy that we have seen in the past - keeping the pressure very high and then settling for whatever deal is possible," he said.
Any progress in talks next month would probably fall short of a comprehensive deal, he added. "It's more likely than not that there will some kind of agreement that would be more cosmetic in nature."
Also supporting the mood in Asia was economic data from China on Monday that showed sustained weakness in exports but a surprising improvement in domestic consumption indicators.
"This is better than what the market was expecting," said Alessia Berardi, senior economist at Amundi Pioneer, adding that markets were downplaying the likelihood of a major escalation in the trade war by Washington.
"The probability of implementing the (delisting) decision for the market is still quite low," she said.
Chinese markets will trade only on Monday before a week-long holiday that marks the 70th anniversary of the founding of the People's Republic of China.
World shares have shed 0.1% this quarter after gains in the previous two quarters.
In currency markets, the dollar found broad support as investors stuck to assets perceived as safe havens.
The dollar was little changed against a basket of six major currencies .DXY at 99.077. Earlier this month it reached 99.37, its highest in more than two years.
China's offshore yuan CNH=EBS also held steady, trading at 7.135 per dollar.
Oil prices slipped after the Chinese economic data, with the trade war weighing on growth in demand at the world's largest crude importer. Brent crude LCOc1 futures fell 44 cents to $61.47 a barrel by 0812 GMT.