* World stocks flat after big falls; Wall Street set for bounce
* Oil up 2 pct after big slide, but market still shaky
* European shares and bonds firm; focus on Italy and European Commission
* Graphic: World FX rates in 2018 http://tmsnrt.rs/2egbfVh (Recasts)
By Sujata Rao
LONDON, Nov 21 (Reuters) - World stocks steadied on Wednesday and Wall Street was set to open firmer after the previous session saw $1 trillion wiped off the value of leading tech shares, while oil prices staged a modest rebound after slumping to one-year lows.
Equity futures for all three U.S. indexes were up 0.4 to 0.7 percent ESc1 NQc1 YMc1 , after two days of losses that wiped out the S&P500's gains for the year and left the tech-heavy Nasdaq benchmark teetering on the brink of falling into the red .IXIC
Tuesday's losses were led by the technology sector, as investors lightened holdings of FAANG shares -- Facebook (NASDAQ:FB), Apple, Amazon, Netflix (NASDAQ:NFLX) and Google (NASDAQ:GOOGL) -- the group that had propelled the Wall Street's decade-long bull market.
But sentiment appeared to recover slightly as Brent crude rebounded almost 2 percent after a six percent slide LCOc1 , MSCI's Asia ex-Japan index closed flat .MIAPJ0000PUS and the main all-country equity benchmark .MIWD00000PUS attempted to snap two days of falls.
Apple and Amazon shares rose 1.0-1.5 percent in pre-market trades AAPL.O AMZN.O .
European equities rose 0.4 percent .STOXX , with the battered tech and bank sectors both up around 0.8 percent .SX8P . The dollar, which had jumped 0.7 percent on Tuesday, slipped 0.2 percent .DXY .
David Vickers, senior portfolio manager at Russell Investments, noted however that gloom has tended to deepen in volatile markets as the Wall Street session progresses and more company earnings emerge.
"High-flying momentum stocks have come off in a fairly spectacular fashion. At one point Apple and Amazon accounted for 40 percent of U.S. equity gains and people were just recycling money into the winners," Vickers said.
"That's come off the boil and set the cat among the pigeons... We've seen a lot of reflexivity, when selling begets selling, the market starts to turn over, people take profits, it leads to another leg down and so on."
Markets also appear to be preparing for a loss of momentum in global economic growth as China takes a hit from Washington's trade tariffs and the United States comes off the sugar-high of President Donald Trump's tax cuts.
Vickers said that after 20 percent-plus earnings growth at U.S. companies, some investors were disappointed with signs this would slow to single digits as the stimulus effect wore off.
"If you have a market like the S&P500, which is two standard deviations expensive, it becomes difficult if you don't think you will get the same kinds of earnings growth in future," he added.
ITALY OPTIMISM
Growth worries have also been revived by comments from U.S. Federal Reserve officials who suggested economic outlook concerns could slow the pace of its monetary policy tightening cycle, or even end it.
The comments knocked U.S. 10-year bond yields to near two-month lows around 3.03 percent, down from 3.25 percent in early- November, but yields rose around 3 bps on Wednesday to around 3.07 percent US10YT=RR .
Jonas David, a strategist at UBS Global Wealth Management, said a G20 meeting between Trump and Chinese President Xi Jinping at the end of the month could determine the course of bond markets and euro/dollar rates.
"If we don't get a relaxation of trade tensions after the G20, markets may start questioning the prospect of another Fed rate hike in December," he said.
The euro rose 0.3 percent after a 0.75 percent drop on Tuesday EUR=EBS , buoyed by promises of reform from Italy's prime minister and hopes that Rome and the European Commission would reach a compromise in a dispute over the deficit in the draft 2019 Italian budget.
Italy's two-year bond yield IT2YT=RR fell 17 bps at 1.22 percent while 10-year yields tumbled as much as nine bps to 3.53 percent IT10YT=RR , and were set for their biggest daily drop in over three weeks European Commission has rejected the draft plan but UBS Wealth's David said markets were right to be optimistic about the eventual outcome of the row between Brussels and Rome.
"We have to keep an eye on these dynamics but factors related to economic momentum in the euro zone and the Fed (interest rate) outlook are far more important (for the euro)," he added.
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https://tmsnrt.rs/2QV3WRL Third-quarter earnings as of Nov 20
https://tmsnrt.rs/2PDCn30 Brent crude oil curve falls into contango png
https://tmsnrt.rs/2R1kFDa
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