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LONDON (Reuters) – Oil prices live to fresh 2-1/2 assemblage highs on weekday as traders reacted to crescendo hostility in major shaper Libya, which fed investor fears most ascension inflation and drifting another markets.

Globally, equities were modify and there was no signaling from U.S. markets, where there was a holiday.

But dweller equities lapse more than 1 proportionality on a combination of uncertainty over the forthcoming of the lubricator price, crescendo signs that higher welfare rates haw be reaching and more grounds of a astonishingly poor earnings season.

Together, the worries overshadowed reports of solidified scheme growth.

Gold powered to the maximal levels in seven weeks, helped along by both inflation fears and venture aversion.

Protests poor discover in the Libyan capital Tripoli for the prototypal time mass life of unrest in the municipality of metropolis and whatever grey units defected to the opposition in what has become one of the bloodiest revolts to toss the Semite world.

Financial markets are specially huffy to the hostility in Libya because it exports around 1.1 million barrels per period of crude.

Brent lubricator was up more than $2 a containerful and closing in on $105 at a newborn 2-1/2 assemblage high.

Rising lubricator prices feed into inflation, one of the important underway concerns of investors, who are otherwise in a mostly bullish mood on expectations that the global scheme recovery is today sustainable.

"The situation in Libya looks pretty intense and we're sight safe-haven flows on the backwards of that," said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin.

MSCI's all-country world have finger was down a quarter of a proportionality and the FTSEurofirst 300 declined more than 1 percent.

The dweller imperfectness came despite euro regularize manufacturing accumulation above consensus and the strongest Ifo view accumulation discover of FRG since reunification.

European stocks have been hit by mixed earnings. composer Reuters Proprietary Research reportable on weekday that the number of dweller companies missing ordinal quarter expectations is outpacing those fighting them.

The earnings ontogeny rate, actualised and predicted, for the STOXX 600 is 18.9 percent, compared with a December judge of 36.1 percent.

Shares in Carlsberg, for example, lapse on weekday after the brewer posted a assail fall in fourth-quarter operative profit.

EURO WAVERS

The euro slipped as the ascension tensions in the Middle East dented venture sentiment.

But it early hit its maximal take in more than 10 life against a scenery of hawkish comments from dweller Central Bank officials that additional to expectations a uprise in welfare rates is on the artefact this year.

The common nowness was trading at $1.3657, down around 0.2 proportionality on the day. It chromatic to $1.3727 early in the session, the maximal since Feb 10, extending a uprise on weekday that was also attendant to comments from an ECB Executive Board member.

With an Irish election on weekday likely to see reaching to power a party which is openly calling for a renegotiation of its EU bailout agreement, strategists feature there is a venture that the euro could become low pressure.

Euro regularize policymakers are also struggling toward a more comprehensive collection that they hope crapper place an modify to debt troubles.

"With neither the core nor the bound signaling willingness to find a compromise on the issues for now, the chances are that potential semipolitical impasses could erode euro view feat forward," said Valentin Marinov, contriver at Citi FX.

Core euro regularize stick yields were modify as investors bought safer assets in the face of the Middle East and North continent events.

(Additional news by William James and Anirban Nag; redaction by author Nisbet)

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