LONDON World stocks held below a recent 8-month high on Wednesday as investors anticipated that further evidence of a recovery in the U.S. economy could add fuel to this year's risk rally and ease concerns about slowing China growth.
Investors awaited monthly U.S. existing home sales figures, due at 1400 GMT, seeking confirmation the supply of homes on the market is being whittled down. Economists in a Reuters survey forecast a 4.62 million annualized unit total versus 4.57 million annualized units in January.
MSCI world equity index was up 0.1 percent, with its rally of more than 10 percent since January stalling after the index hit its highest level since August on Monday.
"This week's retreat is a sign of normal breathing by the market, and more people are jumping on the bandwagon. The liquidity rally is not over," said Franz Wenzel, head of investment strategy at AXA Investment Managers, which has 512 billion euros under management.
"That said, there are a few signs of 'liquidity fatigue' creeping in, with the probability of QE3 in the United States declining and people starting to discount interest rate hikes by the Fed earlier than the time frame set by the central bank."
European stocks were up half a percent while emerging stocks were steady on the day.
Chinese home prices fell in February from January for a fifth consecutive month and are expected to continue heading south in coming months.
Brent oil rose a quarter percent to $124.41 a barrel. Bund futures was down 9 ticks.
The dollar fell 0.2 percent against a basket of major currencies. The euro gained a third of a percent to $1.3262.
(Additional reporting by Blaise Robinson; Editing by Toby Chopra)
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