By Marc Jones
4:43 AM EDT, October 21, 2014
LONDON (Reuters) - A two-day rebound in global shares slowed and the dollar edged lower on Tuesday, as slightly above forecast Chinese growth data failed to erase concerns that the world's second-biggest economy is losing momentum.
China's economy grew 7.3 percent in July-September official data showed, slightly above the 7.2 percent forecast by analysts. However, the growth was the weakest for any quarter since the 2008/09 global financial crisis.
There had been a subdued reaction in Asia and European markets also started cautiously before gradually finding their feet.
Europe's main bourses <0#.INDEXE> were up by 0.2 to 0.6 percent as trading settled [.EU] though euro zone periphery debt markets were under pressure again as worries about debt levels continued to weigh.
Activity was also mixed in the currency market. The Australian dollar
The U.S. currency has lost roughly 2 percent over the last 10 days on signs that global growth and inflation are faltering, fuelling doubts about whether the U.S. Federal Reserve will be able to push ahead in the next year with its first post-financial crisis interest rate hike.
"The main price action is that the dollar is continuing to correct lower," said Lee Hardman, a currency strategist at Bank of Tokyo Mitsubishi in London. "That is largely the reflection of markets pushing back expectations of Fed tightening (interest rate hikes)."
"The China data is a bit of a mixed bag but the bigger picture is that the economy is still losing momentum and will continue to slow into next year."
Shares in French oil giant Total
Like much of the region's stock markets though Total shares fought back from a early 1.2 percent drop to be back level at 4:00 a.m. EDT.
A breakdown of the data from China showed industrial output rose a better-than-expected 8.0 percent in September from a year earlier, up from August's six-year low of 6.9 percent growth.
However, fixed-asset investment and retail sales figures were weaker than expected, suggesting that Beijing may still need additional economic support measures.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> ended broadly flat as the Shanghai Composite index <.SSEC> slipped 0.4 percent.
Japan's Nikkei <.N225> also took a heavy 2 percent hit, as the yen took advantage of the weakened dollar and as investors locked in profits after the previous session's 4 percent rally.
Wall Street had marked solid gains overnight as a quarterly earnings miss from IBM
The yield on benchmark U.S. 10-year notes
That was despite Dallas Federal Reserve President Richard Fisher saying on Monday that last week's turbulent trading should not stop the Fed from ending its stimulus program and the economy could be fully recovered from the effects of the financial crisis and recession by as early as next year.
In commodities trading, spot gold
(Additional reporting by China Economics Team; Editing by Susan Fenton)
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