* World shares down, led by emerging markets
* Wall Street set for modest gains, Europe rises 0.2 pct
* Dollar flat against major currency basket
By Jeremy Gaunt, European Investment Correspondent
LONDON, June 4 (Reuters) - World equities slipped on Thursday, led lower by emerging market stocks which outweighed gains in Europe.
Wall Street looked set for small gains at the open. The dollar reversed early losses and was flat against a basket of major currencies.
MSCI's all-country world stock index <.MIWD00000PUS> was down 0.5 percent, having hit a new 2009 high in the previous session.
Its emerging market counterpart <.MSCIEF> lost 1 percent. Emerging markets have been shaken somewhat by a failed government debt sale in Latvia and fears that it will be forced to devaluate its currency. [ID:nL3896102]
There was also some follow through from Wednesday's U.S. private employment and services sector data, which disappointed investors seeking signs of economic recovery.
European shares, however, boosted the overall picture, rising after steep previous session losses.
The European Central Bank kept interest rates on hold, as did the Bank of England. The latter refrained from expanding its quantitative easing plan. [ID:nL393918]
The FTSEurofirst 300 <.FTEU3> gained 0.2 percent, off its highs, after falling more than 2 percent in the previous session. Japan's Nikkei <.N225> lost 0.75 percent.
Some analysts are expecting recent highs on stocks markets to be followed by at least a pause.
"There is not much room left on the upside for stocks," said Alexandre Le Drogoff, technical analyst at Aurel-BGC.
DOLLAR FLAT
The dollar turned around on the day to be flat against a basket of currencies <.DXY>.
The greenback has come under pressure in the past few weeks partly because the market is nervous about the ability of Washington to finance its growing debt issuance. [ID:nSP412010]
The euro was down 0.1 percent at $1.4135, off its 2009 high of $1.4339.
The dollar gained 0.7 percent to 96.61 yen
On euro zone government bond markets, the 10-year Bund yield