InBev bid boosts European stocks, dollar

By Natsuko Waki

LONDON (Reuters) - European stocks halted a steep slide in world equities and the dollar rallied on Thursday after Belgium's InBev bid $46 billion for its U.S. rival brewer in what would be the third largest foreign takeover of a U.S. firm.

The dollar, which hit a one-month high against other major peers, also benefited from tougher anti-inflation talk by the Federal Reserve which has raised expectations of higher interest rates.

Inflation risks and the impact on regional currencies were cited by HSBC as reasons for advising clients to cut holdings in emerging Asian shares to zero.

If InBev INTB.BR was successful in its bid for Anheuser-Busch (BUD.N), which makes Budweiser, it would create the world's largest brewer.

"(The InBev bid) is a classic form of Foreign Direct Investment and that's dollar positive," said Robert Parker, vice chairman of asset management at Credit Suisse Asset Management.

The FTSEurofirst 300 index rose 0.6 percent with other brewers also rallying on the back of the InBev news.

Shares of InBev rose as much as 4 percent after the news.

"Acquirers aren't being punished for pursuing sensible acquisitions, despite that being surprising given the market conditions," a London-based equity trader said.