* Stock markets tumble as tech stocks sell off
* Inflation angst lingers across assets
* Commodities take breather after rapid rise
* Global asset performance http://tmsnrt.rs/2yaDPgn
* World FX rates http://tmsnrt.rs/2egbfVh (Updates ahead of U.S. market open)
By Marc Jones
LONDON, May 11 (Reuters) - Global stock markets suffered a second day of sharp losses on Tuesday as a combination of inflation worries, lofty valuations and an anti-monopoly drive in China sent the world's mightiest tech giants tumbling.
Europe had touched a record high on Monday but more than 2% falls on London's FTSE, Frankfurt's DAX and the CAC 40 in Paris turned it into a sea of red ahead of what looked like being another down day on Wall Street.
Asia had been brutal overnight too with 3% tumbles on Japan's Nikkei and Hong Kong's Hang Seng giving Asia's main regional equity gauges their worst day in nearly two months.
Talk of tighter regulation from Beijing had sent Chinese tech heavyweights Baidu, Alibaba Tencent , collectively dubbed the BATs, down more than 3%. Food delivery major Meituan had tumbled as much as 9.8% to wipe nearly $30 billion off its value for the week.
It all followed Monday's 3.6% slump in the FANG+ index of U.S. megacap tech firms which had seen electric car pioneer Tesla skid 6.4% and Apple and Google both fall roughly 2.5%.
"The underlying driver is that there is still a rotation out of duration (higher interest rate) sensitive parts of the market and this is why tech stocks are coming under pressure now," said Mizuho's Head of multi-asset strategy Peter Chatwell.
"Given the rise in the earnings power of these firms different governments will also seek to raise more tax revenue from them in the coming years."
The old market adage of sell in May might well be coming true for those high-flying firms. Amazon has lost close to $140 billion so far this month, Tesla over $77 billion and the whole FANG gang combined more that $440 billion.
A worry is that interest rates that have been slashed to help nurse the world economy through the coronavirus pandemic will start to rise again and shatter the assumptions that have been used to keep buying eye-wateringly priced stocks.
The cost of raw materials from copper to wood to wheat have been soaring over the last month, testing the views of top central bankers that rises in global inflation will be transitory as economies emerge from COVID lockdowns.
U.S. breakeven rates, which factor in inflation, have scaled multi-year peaks. Most euro zone bond yields edged back up on Tuesday while a market gauge of long-term inflation expectations was nearing its highest in over two years.
A host of Federal Reserve and European Central Bank speakers this week will be closely watched by markets to assess how authorities are likely to respond. A test case on U.S. inflation will come when the Labor Department releases consumer price index report on Wednesday.
"Inflation's shadow looms large and we do think that there is a limit to the Fed's tolerance of inflation," DBS Bank said in a note.
In currency markets speculation that growing price pressure would erode the dollar's value kept the U.S. currency near a 2-1/2-month low.
A consolidation in commodity markets after their surge on Monday kept the Australian dollar just below a two-month high at $0.7827. The Canadian dollar stabilised near a four-year high, while the New Zealand dollar perched comfortably at February highs.
Oil prices gave up earlier gains as concerns that rising COVID-19 cases in Asia will dampen demand outweighed expectations that a major U.S. fuel pipeline could restart swiftly.
U.S. crude dipped 0.66% to $64.49 a barrel. Brent crude fell to $67.84 per barrel.
Metal markets saw copper prices start to nudge higher again. They were last at $10,530 a tonne having hit a record high $10,747.50 the previous session. Iron ore had settled too after surging 7% on Monday.
(Additional reporting by Tom Westbrook in Singapore, Editing by Gabriela Baczynska, William Maclean)