* European stocks, dollar rise after InBev bid for US rival
* Dollar also benefits from Fed's anti-inflation talk
* World equity index at 2-1/2 month low on inflation worries
(Adds Wall Street outlook)
By Natsuko Waki
LONDON, June 12 (Reuters) - European stocks halted a steep
slide in world equities and the dollar rallied on Thursday after
Belgium's InBev bid $46 billion for its U.S. rival brewer in
what would be the third largest foreign takeover of a U.S. firm.
The dollar, which hit a one-month high against other major
peers, also benefited from tougher anti-inflation talk by the
Federal Reserve which has raised expectations of higher interest
rates.
Inflation risks and the impact on regional currencies were
cited by HSBC as reasons for advising clients to cut holdings in
emerging Asian shares to zero.
If InBev <INTB.BR> was successful in its bid for
Anheuser-Busch <BUD.N>, which makes Budweiser, it would create
the world's largest brewer.
"(The InBev bid) is a classic form of Foreign Direct
Investment and that's dollar positive," said Robert Parker, vice
chairman of asset management at Credit Suisse Asset Management.
The FTSEurofirst 300 index <> rose 0.6 percent with
other brewers also rallying on the back of the InBev news.
Shares of InBev rose as much as 4 percent after the news.
"Acquirers aren't being punished for pursuing sensible
acquisitions, despite that being surprising given the market
conditions," a London-based equity trader said.
MSCI main world equity index <.MIWD00000PUS> was down 0.6
percent after earlier hitting its lowest since early April,
declining for the fifth session in a row.
U.S. stock futures rose half a percent <SPc1>, indicating a
firmer open on Wall Street. Japanese stocks <> fell more
than 2 percent while the rest of Asian stocks fell 2.4 percent
on a MSCI measure <.MIAPJ0000PUS>.
The drastic recommendation by HSBC compared with its
previous stance that investors should invest 2.5 percent in
emerging Asian stocks in a model portfolio.
INFLATION FIGHTERS
The dollar again was a beneficiary of tough inflation talk,
especially as some European Central Bank officials moved to calm
aggressive interest rate hike expectations.
St Louis Federal Reserve President James Bullard said on
Wednesday the Fed must start raising interest rates this year to
keep inflation at bay. Fed vice chairman Donald Kohn also warned
about higher long-term inflation expectations.
Comments from the non-voting member of the rate-setting
committee came after Fed chairman Ben Bernanke made a series of
anti-inflation remarks, including one last week which fired a
rare warning shot against the weak dollar.
The dollar <.DXY> rose 0.8 percent to the one-month high
against a basket of six major currencies.
The euro <EUR=> slipped 0.9 percent to $1.5417, coming under
pressure as investors trimmed bets for aggressive interest rate
hikes after comments some European Central Bank officials on
Wednesday.
A firmer dollar tamed recent rises in energy prices, with
U.S. light crude <CLc1> falling 2 percent to $133.60 a barrel.
Gold <XAU=> tracked oil lower to $869.40 an ounce.
Emerging sovereign spreads <11EMJ> tightened 3 basis points
while emerging stocks <.MSCIEF> were down more than 1 percent.
The September Bund future <FGBLU8> fell 27 ticks.
(Additional reporting by Blaise Robinson)
