* Stocks turn negative after surprise China move
* Dollar index hits 7-mth high; Greece concerns dent euro
* Oil falls more than $1 to below $74 a barrel
By Jessica Mortimer
LONDON, Feb 12 (Reuters) - European stocks turned lower, the dollar jumped to a seven-month high against a currency basket and commodity prices slipped on Friday after China surprised markets by raising banks' reserve requirements.
China sprung the 50 basis point hike on the eve of its New Year's holiday in a move aimed at slowing bank lending and tempering inflation.
Markets were rattled by fears the pace of monetary tightening in China would be more aggressive than previously thought, potentially dampening global growth, while worries over Greece's debt problems continued to sting the euro.
"This has clearly caught the market on the hop," said Gavin Friend, currency strategist at nabCapital in London.
"No one was expecting another rise in China's reserve requirement so soon, and the fact that it has come at a time when markets are so sensitive to any negative news has just added insult to injury."
World stocks reversed earlier gains, with the MSCI world equity index down 0.1 percent, while U.S. stock futures pointed to a lower open on Wall Street.
European stocks turned lower, with the FTSEurofirst 300 down 0.1 percent at 989.51, led down by falls in banks and mining stocks. Prior to the China announcement, the index had risen as much as 1 percent and looked set to extend a winning run into a fifth day.
"The rise in banks' reserve requirements reduces the leverage of the Chinese to buy, and China are big buyers of raw materials so this has weighed heavily on mining stocks," said Mic Mills, senior trader at ETX Capital.
Commodity prices also fell. U.S. crude oil prices fell more than $1 to below $74 a barrel while gold prices lost 1.5 percent to drop below $1,080 an ounce.
The dollar gained nearly one percent against a basket of currencies to hit a high of 80.748, its strongest since July 2009, as investors sought the safety of the U.S. currency.
EURO ZONE WOES
The euro slid to a near nine-month low against the dollar of $1.3533 as the China news came on top of concerns about the lack of any detailed plan to rescue debt-laden Greece and anaemic euro zone economic growth.
The European Union on Thursday sent a "clear message of solidarity" with Greece, tempering fears of a broader crisis in the euro zone bloc, but investors were nervous other euro zone countries may run into similar trouble.
This also pushed up the premium investors demand to hold 10-year Greek and Italian government bonds rather than euro zone benchmark Bunds.
At the same time, data sparked concerns that the region's economic recovery may be starting to falter, with euro zone gross domestic product expanding a meagre 0.1 percent in the fourth quarter.
The next focus for the market on the fiscal saga is meetings early next week between EU finance ministers. Ahead of this, analysts said markets are likely to remain jittery.
"Until we get more details on a political solution for Greece, the euro is going to stay under selling pressure," said Kasper Kirkegaard, currency analyst at Danske Bank in Copenhagen.
Bund futures rose 25 ticks to 123.40.
Investors awaited U.S. retail sales numbers at 1330 GMT.
Emerging stocks dipped 0.1 percent to 922.09.
(Additional reporting by Naomi Tajitsu in London; Editing by Ruth Pitchford)