GLOBAL MARKETS-Stocks retreat on China rate hike fears, oil off

* China growth prompts fears of monetary tightening

* World stocks fall, led by emerging markets

* Euro gains cut by upbeat U.S. economic data.

* Share prices fall for materials, car companies

* Oil slumps on demand concerns, gold drops (Updates with European closing prices, adds comment)

By Daniel Bases

NEW YORK, Jan 20 (Reuters) - Global equities and commodity prices fell on Thursday after robust Chinese economic growth prompted fears the world's second-largest economy would try to choke off excessive demand that is fueling inflation.

Measures to fight price increases, such as tightening monetary policy, were felt across multiple asset classes after China's fourth-quarter gross domestic product soared past forecasts, rising to 9.8 percent.

U.S. earnings disappointments added to the gloom on Wall Street, extending the worst intraday decline for the broad S&P 500 stock index in nearly two months.

"Earnings expectations have been very high, and the market has not been able to see enough positive news to keep prices at these high levels," said Nick Kalivas, an analyst at MF Global in Chicago.

A stronger-than-expected rise in existing home sales and a fall in new claims for jobless benefits could not boost U.S. stocks but did help lift the U.S. dollar.

The euro struggled to regain its footing against the greenback after the data, having earlier gained on expectations the European Union would come up with a comprehensive plan to help debt-laden countries finance their overwhelming obligations.

Emerging market equities led the stock selloff, while materials, mining and car companies were the worst hit by concerns of a potential slackening in demand from China's factories.

MSCI's emerging markets stock index fell 1.64 percent <.MSCIEF> while the broader All-Country World Index <.MIWD00000PUS> lost 1.14 percent.

At midday in New York, the Dow Jones industrial average <.DJI> fell 29.29 points, or 0.25 percent, at 11,796.00. The Standard & Poor's 500 Index <.SPX> lost 4.72 points, or 0.37 percent, at 1,277.20. The Nasdaq Composite Index <.IXIC> dropped 27.41 points, or 1.01 percent, at 2,697.95.

Among the U.S. networking/cloud stocks, F5 Networks tumbled nearly 22 percent at $108.49 on weaker-than-expected quarterly revenue and a gloomy forecast. [ID:nSGE70H0CM]

On the plus side, No. 2 U.S. investment bank Morgan Stanley <MS.N>, which posted a 60 percent increase in quarterly profit, rose 3.53 percent to $28.73 a share.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed down 1.11 percent at 1,139.63 points - its lowest since Jan. 11.

Mining and material stocks suffered, including Alcoa <AA.N>, off 1.93 percent. European miners closed sharply lower. Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton <BLT.L> and Eurasian Natural Resources Corporation <ENRC.L>, lost between 3.56 percent and 4.72 percent.

Ford Motor <F.N> dropped 1.45 percent, off its lows of the day. Europe's BMW <BMWG.DE> and Daimler AG <DAIGn.DE> fell 4.06 percent and 3 percent, respectively.

"A lot of Asian economies, and especially China, (are) overheating. People have invested heavily in commodity shares and any disappointing news might provoke a ... correction," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

Earlier, Japan's Nikkei <.N225> closed 1.1 percent lower.

Oil prices fell 2.41 percent to $88.67 a barrel in New York. Copper had its worst day in two months.

DOLLAR STRENGTH

The U.S. economic data helped to propel the dollar higher against other major currencies. The U.S. dollar index <.DXY> rose 0.27 percent.

The euro dropped against the greenback, trading at $1.3463, down 0.02 percent <EUR=>. The dollar rose 1.12 percent to 82.98 yen <JPY=>.

Against the Swiss franc, the dollar gained more than 1 percent to 0.9670 francs <CHF=>.

Despite its weakness, the euro was supported by a generally optimistic view that the European Union's rescue fund (EFSF) will ultimately offer a comprehensive solution to help euro-zone countries finance mounting debts. [ID:nLDE70J1DW]

That fueled hopes the region's rescue fund could enable buybacks of those states' bonds. As a result, core German debt prices weakened.

The Bund future <FGBLc1> sank to 123.78, its lowest since mid-April 2010 and down roughly half a point on the day.

The benchmark 10-year U.S. Treasuries fell 17/32, pushing the yield up to 3.41 percent.

Spot gold <XAU=> fell $17.65 to a two-month low of $1352.20. (Additional reporting by Edward Krudy, Angela Moon, William James, Gertrude Chavez-Dreyfuss, Jeremy Gaunt, Naomi Tajitsu, Neal Armstrong and Atul Prakash; Editing by Kenneth Barry)