* World stocks slip after Fed, before ECB, BoE
* Euro down as stocks sell off
By Jeremy Gaunt, European Investment Correspondent
LONDON, Nov 5 (Reuters) - World stocks slid on Thursday
following the Federal Reserve's decision to keep interest rates
near zero for "an extended period" and ahead of policy decisions
by the European Central Bank and Bank of England.
The dollar climbed against major currencies, recovering from
a post-Fed sell off and as the stock sell-off hit the euro.
Investors were also bracing for Friday's monthly U.S. jobs
report, which often prompts volatility on financial markets.
"Investors were pushing the market lower, preparing for more
selling by investors such as hedge funds in case U.S. jobs data
raises a disturbance," said Tsuyoshi Segawa, an equity
strategist at Mizuho Securities.
MSCI's all-country world stock index <.MIWD00000PUS> was
down 0.5 percent. The pan-European FTSEurofirst <> slid
1.3 percent and Japan's Nikkei <> closed down 1.3 percent.
The Fed's closely watched policy statement late on Wednesday
was somewhat more upbeat than its statement in September.
However, it was also more explicit about why it expects to
keep rates low for some time yet, citing "low rates of resource
utilization, subdued inflation trends, and stable inflation
expectations", none of which point to a buoyant economy.
That took the edge off a Wall Street rally and the mood
carried over into Asia and Europe, where investors were also
jittery about the ECB and BoE.
Neither is expected to raise interest rates, but there will
be a focus on any changes to other policies designed to pump
money into ailing economies.
Bank of New York-Mellon said it did not expect the ECB to
change interest rates.
"But given the hawkish eyes with which the ECB sees the
world, it would be prudent to suppose that the risks of an
unexpectedly hawkish policy line are credible and hence that
some imminent dismantling of its `emergency' measures is
entirely plausible," it said.
DOLLAR GAINS
The dollar and yen gained broadly after a brief post-Fed
rally by the euro.
"Following the very sharp gains seen (in the euro and higher
risk currencies) in the wake of the Fed decisions, it is not
surprising to see a bit of profit-taking, particularly given
that equities and commodities have moved lower," said Michael
Klawitter, currency strategist at Commerzbank in Frankfurt.
The dollar index <.DXY>, which tracks the dollar against a
basket of currencies, was up 0.4 percent.
The euro <EUR=> fell 0.4 percent to $1.4825, having added
more than 1.0 percent on Wednesday.
On euro zone government bond markets, short-dated debt
yields fell while 10-year Bund yields were flat.
The interest rate-sensitive two-year Schatz yield <EU2YT=RR>
was down 3 basis points at 1.285 percent while the 10-year Bund
yield <EU10YT=RR> was level at 3.316 percent.
(Additional reporting by Jessica Mortimer, editing by Mike
Peacock)
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http://blogs.reuters.com/globalinvesting; for the MacroScope
Blog click on http://blogs.reuters.com/macroscope; for Hedge Hub
click on http://blogs.reuters.com/hedgehub)
