* Turkish central bank raises rates sharply to put floor under lira
* Trump says trade talks with China need “different structure”
* Euro zone slowdown sharper than expected in May -PMI
* Oil falls on shock U.S. stock builds, OPEC supply worries (Updates with afternoon trading)
By Laila Kearney
NEW YORK, May 23 (Reuters) - Global stocks pared losses and the dollar cut gains on Wednesday after the release of minutes from the Federal Reserve’s May 1-2 meeting amid heightened concerns that setbacks to U.S.-China trade talks would undermine world economic growth.
U.S. President Donald Trump said trade discussions with China would need to be rerouted, saying the current track appeared “too hard to get done” and any agreement reached between the world’s two largest economies needed “a different structure.”
The remarks came a day after Trump said he was not pleased with U.S.-China talks, reversing a rally pegged to the White House’s optimistic comments about the discussions over the weekend that led to a strong rally on Monday.
The selloff was tempered, however, after the Fed released meeting minutes indicating a slower-than-expected rate hike pace, which tipped the S&P 500, Nasdaq and Russell 2000 indexes into positive territory.
“You really have to say it is a dovish view to allow inflation to go a little bit above the target for some period of time, recognizing that we have had a long, long run of low inflation,” Mike Baele, managing director at U.S. Bank Private Client Wealth Management in Portland, Oregon said.
“As always, the Fed looms large and we will see what happens.”
The Dow Jones Industrial Average fell 9.4 points, or 0.04 percent, to 24,825.01, the S&P 500 gained 2.76 points, or 0.10 percent, to 2,727.2 and the Nasdaq Composite added 23.49 points, or 0.32 percent, to 7,401.95.
Trump also floated plans to fine China’s ZTE Corp and cast doubt on a planned June 12 summit with North Korean leader Kim Jong Un.
Broad risk aversion hurt the dollar against the Japanese yen. The Japanese yen strengthened 0.63 percent at 110.21 per dollar.
But the greenback managed to rise to a six-month high against the euro on data indicating a slowdown in European business activity before paring gains after Wednesday’s Fed minutes release.
The pan-European FTSEurofirst 300 index lost 1.16 percent and MSCI’s gauge of stocks across the globe shed 0.44 percent.
Another reason for the euro’s woes is Italy, where an incoming coalition government comprised of the two anti-establishment parties - the League and 5-Star - looks likely to implement big-spending policies.
That could add to the country’s big debt pile and see Rome clash with the European Union.
Investors were also eyeing Turkey, whose central bank raised interest rates by 300 basis points in an emergency move to put a floor under the plunging lira currency.
Turkey’s central bank, which had been scheduled to hold its next policy-setting meeting on June 7, said it had increased its top interest rate to 16.5 percent from 13.5 percent.
The lira has fallen about 20 percent so far this year to a series of record lows, but the currency reversed course after the central bank decision and was about 2 percent firmer on the day at 4.5717 to the dollar at 1637 GMT.
Investors have sold off their lira holdings on concerns about loose monetary policy, particularly after recent comments by President Tayyip Erdogan, a self-described “enemy of interest rates.”
Elsewhere, oil fell after an unexpected build in U.S. crude and gasoline inventories despite strong demand, and as traders weighed the possibility of an increase in OPEC crude output to cover any shortfalls in supply from Iran and Venezuela.
U.S. crude fell 0.5 percent to $71.84 per barrel and Brent was last at $79.79, up 0.28 percent on the day.
Additional reporting by Sujata Rao, Hideyuki Sano and Tomo Uetake in Tokyo; Karin Strohecker in London Editing by Nick Zieminski and Chizu Nomiyama