* Stocks selloff lends some support to bonds
* But sentiment still weak on cbank worries
* Euro zone periphery govt bond yields tmsnrt.rs/2ii2Bqr (Adds graphic)
By Dhara Ranasinghe and Sujata Rao
LONDON, Feb 9 (Reuters) - Euro zone bond prices edged higher on Friday as renewed equity market falls gave respite to a market where monetary tightening expectations have this week sent yields to multi-year highs.
World stocks were set for the biggest weekly decline since 2011, with the U.S. Dow Jones index shedding more than 4 percent on Thursday. Chinese markets fell 4 percent on Friday while European shares were down 1.5 percent.
That kept German Bund yields steady around 0.76 percent , below 2-1/2 year highs of just above 0.80 percent.
Most other 10-year bond yields in the euro area also eased a touch while U.S. 10-year yields, which on Thursday approached four-year highs hit earlier this week, also eased.
“The risk-off sentiment in global markets should ultimately support sentiment in bond markets,” Commerzbank strategist Michael Leister, said.
However, the modest relief comes after Germany, the euro zone’s powerhouse economy and its benchmark bond issuer, has seen 10-year bond yields rise for seven straight weeks - the longest stretch of weekly rises since 2007.
If Bund yields end this week higher, that would mark the longest run of weekly rises in 16 years.
Nick Wall, a portfolio manager at Old Mutual Global Investors, said that despite the recent rise, Bund yields remained at “artificially depressed” levels and predicted them to rise another 10-15 basis points in the next six month.
“We expect the general bond selloff to continue and yields to rise meaningfully,” he said.
Borrowing costs in Europe and the United States rose sharply after the Bank of England said on Thursday interest rates probably needed to rise sooner and by a bit more than it had previously thought, given a stronger global economy.
“Yesterday’s hawkish Bank of England caused the market to reprice all developed market central bank paths steeper,” said Peter Chatwell, head of rates strategy at Mizuho in London.
The U.S. Federal Reserve’s William Dudley also signalled his support for a March rate rise despite market volatility.
Wall at Old Mutual added it had been clear for a while that “government spending would pick up and end austerity which brings better growth, inflation and bond supply, all of which would be negative for bonds.”
Reporting by Dhara Ranasinghe and Sujata Rao; Editing by Peter Graff and Alexander Smith