* China growth worries emerging markets
* Japan, Europe shares rise
* Euro hits five-month low against dollar
By Jeremy Gaunt, European Investment Correspondent
LONDON, Jan 21 (Reuters) - Developed and emerging equity
markets diverged on Thursday with the latter falling on worries
China will take more measures to temper growth after reporting
its fastest quarterly growth in two years.
Bourses in Europe and Japan, however, put in gains with many
investors waiting for the next batch of U.S. earnings reports,
which include Goldman Sachs <GS.N>.
The euro hit a five-month low against the dollar as worries
over euro zone member Greece continued to grind. The dollar rose
to a 4-1/2 month high against a basket of currencies <.DXY>
China's annual gross domestic product rose 10.7 percent in
the fourth quarter, while third quarter growth was revised up to
9.1 percent. Growth for the year was 8.7 percent, surpassing
Beijing's 8.0 percent target.
Consumer inflation rose to 1.9 percent in December on the
year from 0.6 percent the previous month.
This left many analysts expecting more policy tightening
from China and its impact on global recovery. []
"Since major economies in the world are still struggling
over the timing of their exit strategies, speculation about
China tightening would raise worries about the impact on the
world economy short term," said Jun Kato, senior chief analyst
at Shinkin Central Bank Research Institute.
Emerging market stocks as measured by MSCI <.MSCIEF> were
down around three-quarters of a percent.
But Japan's Nikkei <> closed up 1.2 percent, partly on
export prospects from a weaker yen.
The pan European FTSEurofirst 300 <> was up 0.2
percent, driven by banks and what analysts said was a belief
that the market had sold off too much on Wednesday when it fell
1.5 percent.
As well as Goldman Sachs, investors were also eyeing Google
<GOOG.O> earnings, although these will be released after
European markets close.
EURO SLIDES
The euro hit a 5-month low against the dollar before
recovering, while the Australian dollar recouped losses after
the higher-than-expected Chinese data.
The euro was flat on the day at $1.4093 <EUR=>, recouping
some losses after hitting the low of $1.4067 on trading platform
EBS.
Analysts said the euro remained vulnerable on fiscal
concerns of euro zone peripheral economies, particularly
debt-laden Greece.
The spread between Greek and German 10-year bond yields hit
311 basis points, its widest since Greece joined the euro in
2001.
"Momentum is now on the side of the euro bears and it is
difficult to see this ending anytime soon," said Stuart Bennett,
currency strategist at Calyon.
(Additional reporting by Tamawa Desai and Kaori Kaneko, editing
by Mike Peacock)
