Global equities and crude prices eased on Thursday on concerns over economic growth after the U.S. Federal Reserve's pessimistic outlook, though the dollar recovered from the previous session's losses.

The Fed acknowledged a faltering pace of U.S. economic recovery on Wednesday as it renewed its vow to hold benchmark interest rates exceptionally low for an extended period.

Its assessment followed data showing that sales of new homes in the United States fell to their lowest level ever in May. The negative tone on the speed and strength of the recovery from the Federal Reserve is infringing on investor's expectations and there's a sense that will be a long period of anemic growth, said Henk Potts, analyst at Barclays Wealth in London.

Europe's FTSEurofirst 300 fell for the third day, down 0.9 percent and basic resources shares lost 1.5 percent, shrugging off hopes new Australian Prime Minister Julia Gillard could compromise on a controversial mining tax.

The basis resources sector carried a one-year forward price-to-earnings of 11.37, in line with its five-year average of 11.34, according to Thomson Reuters DataStream.

World stocks measured by MSCI All-Country World Index

drifted 0.1 percent lower, down for a third consecutive day.

The index has fallen 5.9 percent this year, and carried a one-year forward P/E of 11.9 versus a five-year average of 13.3, according to DataStream.

In Asia, Tokyo's Nikkei average was flat as short-covering petered out, with charts showing further gains were likely to be difficult.

Japan's annual export growth slowed for a third consecutive month in May in a sign that its overall economic growth could start to slow as the pace of recovery in overseas demand moderates.

DOLLAR RECOVERS

The dollar rose 0.2 percent against a basket of currencies after losing 0.4 percent on Wednesday on the back of Fed's assessment of a faltering pace of recovery.

The euro was down 0.2 percent at $1.2284.

There was a little disappointment in the market from the Fed statement but the euro has struggled to rally. The market remains skeptical about problems in Europe and that feeling won't go away soon, said Antje Praefcke, currency analyst at Commerzbank.

German Bunds turned positive as peripheral euro zone issuers remained under pressure and after the Fed's comments.

The Greek/German government bond yield spread has widened sharply this week because of expected forced selling at the end of the month by passive indexed funds after Moody's Investors Service became the second rating agency to downgrade Greece to junk earlier this month.

The spreads of Greek 10-year bond over German Bunds rose to 802 basis points (bpS) versus 792 bps at Wednesday's settlement.

Five-year credit default swaps (CDS), an insurance-like instruments against debt default, rose to 958 bps from 934 bps in New York on Wednesday, CDS monitor CMA DataVision said.

September Bund futures were 24 ticks higher at 128.86, and 10-year German yields fell 3 bps to 2.618 percent.

(Additional reporting by Simon Falush, Neal Armstrong and Kirsten Donovan; Editing by Toby Chopra)

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