(Updates prices as of 1129 GMT)

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Stocks unable to keep momentum after China's stimulus

measures

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European stocks eke out slim gains after opening in the

red

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U.S. consumer confidence data boosts case for Fed rate cut

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By Tom Wilson

LONDON, Sept 25 (Reuters) -

Stocks globally struggled on Wednesday to maintain momentum

fuelled by China's

monetary stimulus

measures, with crude oil retreating and the dollar under

pressure.

European stocks eked out slim gains after opening

in the red, following a near 1% advance a day earlier. Oil and

gas shares led the losses, falling 0.5% on concerns

China's stimulus plans would not do enough to boost demand.

Wall Street was set for a

tepid start

, too, with S&P 500 futures flat. The benchmark S&P

500 and the Dow had closed at record highs for the

second straight session on Tuesday.

The dollar, meanwhile, dipped to its lowest in a month

versus the euro and in two and a half years against the British

pound. U.S. consumer confidence data that showed the largest

decline in sentiment since August 2021 had overnight boosted the

case for a second hefty interest rate cut at the Federal

Reserve's next meeting.

The expectation of another 50-basis point Fed rate cut at

the November meeting jumped to more than 60% from 53% a day

earlier, according to CME Group's FedWatch Tool.

"It feels like more is coming on the rate cutting side,"

said Samy Chaar, chief economist at Lombard Odier in Geneva.

The People's Bank of China followed its announcement of

wide-ranging policy easing on Tuesday with a cut to medium-term

lending rates to banks on Wednesday. Beijing's broad-based

stimulus - the biggest since the pandemic - also includes steps

to boost China's stock market and support for the ailing

property sector.

Mainland Chinese blue chips gained 1.5%, adding

to a 4.3% jump in the prior session. Hong Kong's Hang Seng

climbed 0.7%, adding to Tuesday's 4.1% surge.

While market players welcomed the stimulus, some analysts say

the PBOC's policy weapons don't have the key enemy to economic

growth in their line of sight: persistently weak consumer

demand.

"It's still short of that necessary to really handle the

broad imbalances of the dampening down of domestic demand in

China," Lombard Odier's Chaar said of the measures.

The strong start for Chinese stocks briefly invigorated other

regional indexes, but those gains soon fizzled. MSCI's broadest

index of Asia-Pacific shares outside Japan

gained 0.4%.

"The debate remains intense on whether there are legs to

this rally, though the desk is seeing investors opting to

buy/short cover first and ask questions later," UBS analysts

wrote in a note to clients.

Brent crude futures slipped 0.7% to $74.65 a

barrel, not far from Tuesday's high of $75.87, a level

previously not seen since early September.

U.S. West Texas Intermediate crude slipped 0.8% to

$71.01 per barrel.

DOLLAR ON THE BACK FOOT

Overall, the dollar stayed on the back foot.

After China's stimulus, the yuan strengthened to a 16-month

high, crossing the key 7-per-dollar level in offshore trading

before retreating to 7.0173 per dollar.

The euro added 0.1% to $1.1187 after earlier

pushing as far as $1.1199 for the first time since Aug. 26.

The Japanese yen was steady at 143.23 per dollar,

after earlier flipping between moderate gains and losses.

Sterling slipped against the dollar, retreating from a

two-and-a-half-year peak, as investors turn their focus to next

month's British budget and the Bank of England's interest rate

decision due eight days afterwards.

The pound fell 0.3% to $1.3372, marking a break after five

consecutive days of gains.

Meanwhile, Australia's dollar initially scaled its

highest since February of last year at $0.6908 but then slipped

back to sit at $0.68805 after inflation figures showed some

cooling, potentially setting up an earlier rate cut by the

central bank.

"The fall in the underlying measures of inflation is an

unexpected and welcomed surprise," said Tony Sycamore, an

analyst at IG, a brokerage.

Gold marked a new record peak at $2,670.43.

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