Global stocks and metals fall

By Dominic Lau

LONDON (Reuters) - World stocks and metal prices fell on Thursday after bleak data and poor corporate earnings fueled gloom about the economic outlook, while sterling rose after the Bank of England cut interest rates to a record low.

The BoE cut borrowing costs by 50 basis points to 1.5 percent as expected amid signs Britain is heading for a deep recession.

The financial crisis, triggered by a meltdown in the U.S. subprime mortgage market, has spread far and wide with the ensuing economic slowdown leading to higher unemployment and slowing exports.

Sterling rose about two U.S. cents to $1.5247 and firmed to a three-week high against the euro.

"I think it's pretty likely that it was sterling that decided them to slow down the pace of cuts," said Brian Hilliard, economist at Societe Generale. "I still think there's more (monetary easing) in the pipeline.

The euro fell 0.6 percent to $1.3569 but the dollar slipped more than 1 percent against the yen as falling share prices sapped demand for risky investments.

Reports showed economic sentiment in the euro zone plumbed record lows in December amid rising unemployment, and inflation expectations tumbled. That further strengthened the case for a European Central Bank rate cut next week [ID:nL8189665].

Also, German exports posted a record fall in November, as demand for cars and others mainstays of the manufacturing economy plummeted, compounding worries about the country's already bleak 2009 outlook [ID:nL88871].

ECB President Jean-Claude Trichet said in a magazine interview published on Wednesday there had been a significant deterioration in the euro zone economy in the last couple of months [ID:nN07498399].

Corporates, meanwhile, are shedding staff to save costs and are painting a darker picture of their earnings.

Intel Corp (INTC.O) on Wednesday cut its fourth quarter sales forecast for the second time, while EMC Corp (EMC.N), the world's biggest maker of data storage equipment for businesses, said it plans to cut 2,400 jobs, or 6 percent of its staff.

Global stocks as measured by the MSCI world index .MIWD00000PUS lost 1.1 percent, with the pan-European FTSEurofirst 300 .FTEU3 shedding 0.9 percent and Tokyo's Nikkei average .N225 down 3.9 percent.

Futures on U.S. Dow Jones industrial average and the S&P 500 pointed to a weaker opening while Nasdaq futures were also lower.

SLICK OIL, DULL METALS

Oil prices held around $43 a barrel on escalating violence in the Middle East, after tumbling overnight.