* European shares hold steady after Asia markets fall
* Oil slips after U.S. crude's short-lived respite
* Rouble plunges over 3 percent to set new record low
* Dollar moves back toward 1-year low vs. safe-haven yen
* ECB set to keep rates steady, Draghi under pressure
By Marc Jones
LONDON, Jan 21 (Reuters) - European shares and oil prices
held steady at multi-year lows on Thursday after a torrid two
days that has wiped trillions of dollars off global markets.
A 3-percent slump in Chinese stocks had given Asia another
bruising, so there was relief as early 0.2-0.4 percent gains for
London's FTSE .FTSE , Germany's DAX .GDAXI and France's CAC
40 .FCHI pulled markets out of their nosedive.
The FTSEurofirst 300 .FTEU3 hit its lowest since October
2014 on Wednesday and the MSCI all-world country index
.MIWD00000PUS was at its June 2013 low.
Oil prices, down more than 25 percent this year, have been
one of the main drivers of the cross-asset rout, were also
steadier at $27.60 for Brent LCOc1 and $28.15 for WTI CLc1 .
O/R
The European Central Bank (ECB) meets on Thursday and is
expected keep already record low interest rates on hold. Traders
will be watching closely to see what impact the latest market
turmoil is having on the bank's decision makers.
"Europe is holding up a bit better which is welcome
considering Asia equities continued to trade lower," Societe
Generale strategist, Alvin Tan, said.
"For one thing, oil is not exactly rallying but at least it
is holding on, and we have the ECB meeting today which is a big
event, so I think people are just being a bit more restrained."
With nerves still fragile and risk appetite low, the strain
continued to show on euro zone periphery bonds. Portuguese
10-year yields rose 6 basis points (bps) to 3 percent
PT10YT=TWEB , pulling the gap with German equivalents to its
widest since October 2014.
In Italy, with yields up 3 bps at 1.69 percent, the gap was
the widest since August last year.
In emerging markets the tensions were even more intense.
Russia's rouble RUB= tanked more than 3 percent as it set a
record low against the dollar for a second day running.
China stocks .CSI300 .SSEC also ended down 3 percent
after a volatile session there. That in turn sent MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS to a new 4-year low.
Japan's Nikkei average .N225 ended down 2.4 percent,
adding to its 3.7 percent plunge in the previous session.
Shanghai-based investor director at Nanhai Fund Management
Co, David Dai, said fears of a prolonged bear market were,
nevertheless, overdone.
"With stocks having fallen so much, much of the risk has
been priced in and another free-fall is quite unlikely, although
the chance of a sustainable rebound is slim," he said.
In the currency markets, the dollar index .DXY , which
tracks the U.S. unit against a basket of six counterparts, was
down about 0.1 percent at 99.025.
The greenback shed about 0.1 percent to 116.75 yen JPY=
after falling to 115.97 on Wednesday, undermined by U.S. data
Ahead of the ECB meeting, the euro was buying just
over $1.09. Before the last one in December, it had been just
above $1.05.
"Risk aversion related to global issues may result in
periods of support for the euro," Credit Suisse (VX:CSGN) currency
analysts wrote.
"Falling oil, however, raises risks that ECB may ease
again," they said.