GLOBAL MARKETS-Buffett boon peters out as fear preys on stocks

(Adds European outlook, updates prices)

By Tom Miles

HONG KONG, Feb 13 (Reuters) - Asian equity markets wavered on Wednesday after an early surge, fuelled by billionaire investor Warren Buffett's offer to take on $800 billion of U.S. municipal bond risk, petered out and U.S. economic worries resurfaced.

Buffett's plan eased fears for the health of the insurance sector and lifted Asian equities in early trade, although they later slipped back. [ID:nN12216014]

European stocks are set to open about 1 percent lower, with earnings from bid target Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz), steel major Arcelor Mittal (MTP.PA: Quote, Profile, Research, Stock Buzz) and oil group Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) to chew over.

Japan's Nikkei average .N225 pared early gains to close 0.4 percent higher as investors avoided making major bets ahead of important Japanese and U.S. economic data. Major banks such as Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) fell, offsetting gains in exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz).

MSCI's index of Asian stocks outside Japan .MIAPJ0000PUS was down 0.2 percent by 0655 GMT, while Shanghai stocks .SSEC, which were catching up with global declines after the week-long Lunar New Year holiday, fell 2.4 percent.

Seoul's benchmark Korea Composite Stock Price Index also turned south to finish down 0.7 percent after Woori Finance Holdings' (053000.KS: Quote, Profile, Research, Stock Buzz) weak profits and subprime-linked write-offs stirred worries about slowing earnings momentum in the financial sector. [ID:nSEF000100]

"Investors seem to have started bracing for disappointing figures when the United States releases January retail sales data, while continued foreign selling is also a worry," said So Jang-ho, an analyst at Samsung Securities.