Global markets - Gloomy mood prevails despite calmer commodities

LONDON (Reuters) - Commodity prices caught a break from a bruising sell-off on Wednesday, helping to put global equities on a slightly steadier footing after a rough week driven by fears over global demand.

The mood was far from euphoric, though. Traders warned that markets were likely to give up their gains throughout the day and investors were preparing portfolios for year-end rather than making major new reallocations.

Economic data offered little to cheer about. China's consumer inflation picked up but remained under the government's 2015 price target of 3 percent. The ripple effects of China's slowdown was evident in Europe, where German imports fell in October and exports also weakened.

"We are in a time when hedge funds are closing their books and people still haven't given up on a rally before the end of the year," said Markus Huber, a London-based trader at Peregrine & Black. "It does not look like Europe can hold onto the (positive) momentum."

European equities were underperforming a broadly flat MSCI All-Country World index at 0907 GMT. The pan-European FTSEurofirst 300 was down 0.3 percent, with benchmark indexes in London, Paris and Frankfurt down around 0.2 percent after opening higher.

The euro and German bond yields also edged higher. The dollar was down 0.3 percent against a basket of six major currencies.

Calmer commodity prices helped steady sentiment. U.S. crude traded 57 cents higher at $38.07 per barrel and Brent rose to $40.74, a slight respite from a year-long battering for commodities linked to worries about a slowdown in China and emerging markets.

But mining stocks see-sawed, with Anglo American slumping more than 10 percent to a fresh all-time low.

Highlighting the plight of the broader commodity markets, the Thomson Reuters Core Commodity CRB index on Tuesday fell to its lowest since November 2002.

Analysts pointed to the weak Chinese yuan as a factor deepening the gloom for commodity exporters.

"A weakening of the CNY sounds alarm bells for the many exporters that worry that Chinese demand will be dampened by a weaker currency," wrote Angus Nicholson, market analyst at IG in Melbourne.

The currency has weakened significantly after China's devaluation in August and the People's Bank of China (PBOC) set the yuan midpoint rate at a four-year low.

Some still consider the yuan overvalued and expect it weaken further when it joins the IMF's Special Drawing Rights (SDR) currency basket. In theory, the yuan's SDR inclusion would mean the PBOC may have to relinquish some of its control over the currency.

OPEC's decision on Friday not to cut its production target has sparked concerns global oil producers will pump even more crude into an already oversupplied market.

(Reporting by Lionel Laurent, editing by Larry King)