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European shares slip; Ireland index up

By Joanne Frearson LONDON, Nov 12 (Reuters) - European shares slipped on Friday as talk of a rate hike in China hit commodity stocks, though most peripheral markets recovered from earlier falls on talk of a rescue package for Ireland. By 1248 GMT, the pan-European FTSEurofirst 300 index of top shares was down 0.5 percent at 1,102.99 points after early being as low as 1,088.36 Peripheral markets were mostly higher. Although an Irish Finance Ministry spokesman said market talk of the bailout was untrue. Ireland's ISEQ Overall stock market index rose 0.3 percent. EU leaders at the Group of 20 summit in Seoul sought to give investors reassurance on Ireland after it clarified that bondholders would not be forced to take any losses on outstanding debt. Meanwhile, German Chancellor Angela Merkel, speaking at the G20 summit, said the European Union was ready to deal with all scenarios in the Irish financial crisis "On the G20 we should get more communication over the weekend, I don't think we can expect the world will be fixed, but what we want is a feeling that the worst will be avoided," Philip Isherwood, European equities strategist at Evolution Securities, said. Italy's FTSE MIB, Portugal's PSI20 and Spain's IBEX 35 were also recovering from earlier falls and gained 0.02 to 0.6 percent. The Thomson Reuters Peripheral Eurozone Countries Index was 0.9 percent higher. Banking shares were in demand on the rescue talk, with the STOXX Europe 600 Banks index up 0.4 percent. Allied Irish Banks jumped 16 percent and Bank of Ireland rose 8.9 percent, while Royal Bank of Scotland , which has exposure to Irish sovereign debt was 3.3 percent higher. "There has been an excess of optimism in equities lately and the market was ripe for a correction. But, all in all, recent data shows inflows into the asset class have been brisk and the pullback will be seen as a good opportunity to buy," Louis Capital Market analyst Jacques Henry said. COMMODITIES SLIP Commodity stocks were among the worst performers on concerns the global recovery could stall after talk of a possible Chinese interest rate hike, pushing metal and crude oil prices lower. The STOXX Europe 600 Basic Materials fell 2.1 percent, with Kazakhmys, Anglo American, Antofagasta and Eurasian Natural Resources Corporation down 2 to 2.1 percent. The STOXX Europe 600 Oil & Gas lost 1.2 percent, with BG Group and Total down 0.7 to 0.6 percent, respectively. Looking at individual stocks, Richemont jumped 5.2 percent after first-half profits beat expectations. Across Europe, the FTSE 100 index was down 0.2 percent, Germany's DAX was flat and France's CAC 40 was down 0.9 percent. (Reporting by Joanne Frearson. Editing by Jane Merriman) Keywords: MARKETS EUROPE STOCKS ============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance: Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2 (joanne.frearson@thomsonreuters.com; +44 207 542 2773, Reuters Messaging:joanne.frearson.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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