* European, Asian shares fall on growth worries
* Aussie dlr at 2-wk low, mkt trims bets on large rate rise
* Wall Street poised to head lower
By Emelia Sithole-Matarise
LONDON, Oct 28 (Reuters) - World stocks and high yielding
growth-related currencies slid on Wednesday, boosting safe-haven
government debt as investors fretted about the pace of economic
recovery after disappointing U.S. consumer confidence data.
The yen and the U.S. dollar edged higher as traders trimmed
positions and reduced risk exposure, while oil fell below $79 a
barrel, giving up some of the previous day's percent gains as
equities extended losses.
European shares hit a three-week low, led by sharp falls in
banking shares after Santander reported a 2.8 percent fall in
net profit and on concerns about the rescue of "bad banks" in
Ireland.
U.S. equity futures were down 0.6 percent <SPc1>, pointing
to further losses on Wall Street with investors bracing for
durable goods data and new home sales figures for further
insights into the health of the world's biggest economy.
The Conference Board's weaker-than-expected U.S. consumer
confidence index for October on Tuesday revived growth worries,
cooling investor appetite for riskier assets like equities and
higher yielding currencies.
"It's giving the bears something to shout about. There's
still a lot of double dippers out there who don't believe this
is for real and don't think the economy is going to turn," said
Kenneth Broux, a market economist at Lloyds TSB.
The pan-European FTSEurofirst 300 index <> was down
1.7 percent by 1152 GMT, reversing the previous day's gains.
The MSCI's all-country world stocks index <.MIWD00000PUS>
shed 0.9 percent to its lowest in three weeks. Its emerging
market sub-index <.MSCIEF> was down over 2 percent and Japan's
Nikkei <> closing down 1.35 percent.
The Australian dollar fell to a two-week low after consumer
price inflation was generally in line with forecasts but not
strong enough to justify expectations for an aggressive interest
rate rise by Australia's central bank next week. []
NORWEGIAN RATE HIKE EXPECTED
In Europe, focus is on Norway with Norges Bank expected to
become the first European central bank to raise interest rates
since the global financial crisis.
Euro zone government bonds and U.S. Treasuries gained
traction on the back of falling equities.
The benchmark 10-year Treasury note yield was down about one
basis point at 3.445 percent <US10YT=RR> as the market also
awaited the sale of $41 billion in five-year notes, part of this
week's record $123 billion supply.
Strong demand at Tuesday's $44 billion sale of 2-year notes
had helped soothe worries about waning demand.
"With the global tone of equity markets weakening we think a
bullish fixed income correction is becoming increasingly
likely," Societe Generale analysts said in a note.
(Additional reporting by Ian Chua, editing by Mike Peacock)
