* MSCI world equity index steady at 287.12
* European shares slip; BNP Paribas rises
* Yen off highs after Japan's Fujii comments
By Natsuko Waki
LONDON, Sept 29 (Reuters) - World stocks steadied on Tuesday
as weaker oil prices and caution following a recent rally
prompted investors to lock in gains and stay on the sidelines.
The yen slipped from the previous day's 8-month high versus
the dollar after Japanese Finance Minister Hirohisa Fujii said
he would not rule out taking action if currency moves were
irregular. []
Oil fell towards $66.5 a barrel as investors anticipated a
weak demand outlook from weekly inventory from the United
States. This weighed on basic resource shares.
However, BNP Paribas' move to pay back state financial
support and growing corporate takeover activity bolstered
confidence about economic recovery provided underlying support
for risky assets.
"There's a degree of profit taking with many investors quick
to cash in after yesterday's gains, but the underlying market
sentiment remains positive," said Howard Wheeldon, strategist at
BGC Partners.
MSCI world equity index <.MIWD00000PUS> was almost unchanged
on the day. The FTSEurofirst 300 index <> of leading
European shares was also steady.
Shares of BNP Paribas, France's biggest bank by market
capitalisation, rose 3 percent <BNPP.PA> after it launched a
capital increase for 4.3 billion euros as part of its move to
reimburse the French state early. []
Its move follows similar paybacks from UBS, Goldman Sachs,
JP Morgan and Morgan Stanley.
Emerging stocks <.MSCIEF> rose 0.9 percent.
U.S. stock futures were down around 0.1 percent <SPc1>,
pointing to a slightly weaker open on Wall Street later.
U.S. stocks rallied on Monday after Xerox Corp <XRX.N>
agreed to buy Affiliated Computer Services <ACS.N> for $5.5
billion and Abbott Laboratories <ABT.N> said it would pay $6.6
billion for Solvay's <SOLB.BR> drug unit.
The cost of financing has fallen significantly since the
start of the credit crisis as central banks around the world cut
interest rates to near zero, making it easier for corporates to
raise funds to conduct merger and acquisition activity.
"Whilst some companies are still in the process of repairing
their balance sheets from the credit binge earlier in the
decade, there are also a number sitting on large amounts of
cash, which sooner or later they will need to put to work,"
Calyon said in a note to clients.
"We feel it is too early to be calling the beginning of
another M&A cycle just yet though ... However, as economic
visibility improves, we believe the M&A theme could be big next
year."
U.S. crude oil <CLc1> fell 0.3 percent to $66.61 a barrel.
The yen fell 0.2 percent to 90.23 per dollar <JPY=>, having
risen as high as 88.22 on Monday. The dollar <.DXY> was steady
against a basket of major currencies.
The September Bund future <FGBLc1> was steady.
(Additional reporting by David Brett; editing by Chris Pizzey)
