GLOBAL MARKETS-Shares edge down as uncertainty sets in over global economy
* Major stock markets edge lower, mirroring Wall Street
* Currencies hug tight ranges, Fed, ECB uncertainty cited
* German Ifo index confirms only modest growth outlook
* Oil eases ahead of Iran nuclear talks
LONDON, Sept 24 (Reuters) - A smaller than expected rise in German business sentiment in September and growing uncertainty over the strength of the global economy helped nudge world shares lower on Tuesday, while major currencies were trapped in tight ranges.
Germany's Ifo think tank said that its latest reading on business morale showed that the euro zone's biggest economy was on a sustainable growth path after weak start to the year, but that any recovery was likely to be modest.
"The further rise in German Ifo business sentiment confirms that the economy is recovering, but we continue to expect growth to be reasonably sluggish," said Ben May, a European economist at Capital Economics.
The euro initially slipped when the Ifo fell short of expectations though soon recovered to be little changed against the dollar at $1.35.
European shares turned negative after the report, trading down 0.1 percent on the day, before edging higher again , while German government bond futures hit a session high, up 33 ticks on the day.
The MSCI global index of shares dipped 0.1 percent after MSCI's broadest index of Asia-Pacific shares outside Japan had earlier eased 0.6 percent, taking its cue from a softer Wall Street.
One bright spot was shares in iPhone suppliers, burnished by news that Apple Inc sold 9 million new iPhones during their first three days in stores with U.S. stock futures point to a steady start on Wall Street later in the day.
ECB ADDS TO CAUTION
The euro was still holding near levels reached on Monday after European Central Bank resident Mario Draghi said he remained ready to inject more liquidity into banking markets if necessary to support the economy.
Those remarks added to a sense of caution among investors over the outlook, caution that ECB policymaker Ewald Nowotny added to on Tuesday by saying any withdrawal of the current level of policy support would have to be implemented extremely carefully.
Uncertainty over the economic outlook has grown on both sides of the Atlantic since the U.S. Federal Reserve last week stunned investors by deciding not to reduce its asset purchases from the current $85 billion monthly pace, sparking a global stock rally.
The decision left investors both encouraged that support for the economy would continue for a while longer but also in some doubt over whether they had overestimated the solidity of the U.S. economic recovery.
It also heightened fears among some investors that a looming political showdown in Washington over the U.S. government's budget and its ability to fund itself could have a bigger knock-on effect on the underlying economy than had been expected.
In commodity markets, gold steadied around $1,315 an ounce after shedding 3.2 percent in the past three sessions as investors fret over what the Fed will do next.
The story was much the same in copper futures which held at $7,227.51, from last week's peak of $7,368.00.
Brent crude oil meanwhile had fallen below $108 a barrel to $107.75 as geopolitical tensions ease slightly ahead of nuclear talks involving Iran and the United States later this week.
Iran has agreed to new talks on its nuclear programme with top diplomats from six world powers, including U.S. Secretary of State John Kerry, raising hopes that Tehran's relations with the United States could thaw.
"Geopolitical tensions are reducing and oil output is rising so these two factors are driving oil futures to moderate," IHS analyst Victor Shum said.
U.S. officials have also said a meeting is possible this week between President Barack Obama and Iran's new centrist president, Hassan Rouhani.