* MSCI's world equity index falls 0.1%
* European shares turn slightly positive
* Investors doubt U.S. delisting threat will be carried out
* Dollar stands firm
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Updates prices throughout; adds euro zone bond yields)
By Tom Wilson
LONDON, Sept 30 (Reuters) - Shares on Monday largely
shrugged off reports that Washington is considering delisting
Chinese companies from U.S. stock exchanges, with market players
downplaying the likelihood of such radical escalation of the
U.S.-China trade war.
U.S. President Donald Trump is looking at the move as part
of a broader effort to limit U.S. investment in Chinese
companies, sources told Reuters on Friday, though it was not
clear how any such delisiting would work. But MSCI's world equity index .MIWD00000PUS , which tracks
shares in 47 countries, was little changed, down 0.1%. MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS was flat.
Europe's Euro STOXX 600 .STOXX managed a 0.1% gain after
opening lower. Markets in Frankfurt .GDAXI and Paris .FCHI
were flat. London .FTSE slipped. The STOXX 600 index is on
track for a 3% monthly rise, its third straight quarterly rise.
Wall Street futures gauges NQcv1 suggested that U.S.
stocks would bounce back, indicating gains of 0.4%. The concern
around the latest Sino-U.S. tensions had caused U.S. stocks to
fall on Friday, with the Nasdaq .NDX losing 1%.
The news also knocked Chinese shares listed on U.S.
exchanges on Friday. Alibaba Group BABA.N and JD.com JD.O
both lost 5% to 6% on Friday.
Following the reports, China warned of instability in global
markets from any "decoupling" with the United States, noting a
U.S. Treasury response that said there were no immediate plans
to block Chinese listings. Market players said markets thought the threat of delisting
was just a tactic before U.S.-China trade talks resume next
week. Investors are accustomed to belligerence from Trump before
he dials down his rhetoric, said Luca Paolini, chief strategist
at Pictet Asset Management.
"It's a strategy that we have seen in the past - keeping the
pressure very high and then settling for whatever deal is
possible," he said.
Any progress in talks next month would probably fall short
of a comprehensive deal, he added. "It's more likely than not
that there will some kind of agreement that would be more
cosmetic in nature."
Also supporting the mood in Asia was economic data from
China on Monday that showed sustained weakness in exports but a
surprising improvement in domestic consumption indicators.
"This is better than what the market was expecting," said
Alessia Berardi, senior economist at Amundi Pioneer, adding that
markets were downplaying the likelihood of a major escalation in
the trade war by Washington.
"The probability of implementing the (delisting) decision
for the market is still quite low," she said.
Chinese markets will trade only on Monday before a week-long
holiday that marks the 70th anniversary of the founding of the
People's Republic of China.
BOND YIELDS UP, DOLLAR STANDS TALL
Euro zone bond yields rose to their highest in a week after
the European Central Bank's head reiterated the need for fiscal
policy to support long-term growths. Germany's 10-year bond yield, a benchmark for the bloc's
government debt, rose to a one-week high at -0.54% DE10YT=RR .
Thirty-year yields were also higher.
In currency markets, the dollar found broad support as
investors stuck to assets perceived as safe havens.
The dollar was little changed against a basket of six major
currencies .DXY , adding 0.1% to 99.117. Earlier this month it
reached 99.37, its highest in more than two years.
China's offshore yuan CNH=EBS also held steady before
China's holiday, trading at 7.139 per dollar.
Oil prices slipped after the Chinese economic data, with
the trade war weighing on growth in demand at the world's
biggest crude importer. Brent crude LCOc1 futures fell 81
cents, or 1.3%, to $61.47 a barrel by 0136 GMT.