GLOBAL MARKETS-Asia stocks drift up but growth outlook cloudy

                                
 * Fears of double dip in focus, with U.S. and China slowing
                                
 * Australia c.bank, ECB to meet this week
                                
 * Bank of China shares drop after $8.8 bln rights issue
                                
 By Kevin Plumberg
                                
 HONG KONG, July 5 (Reuters) - Asian stocks inched higher on
Monday, with investors taking profits on defensive plays and
buying back other beaten down shares, though selling could
resume shortly as the U.S. and Chinese economies are slowing in
tandem.
                                
 Financial bookmakers expected major European stock markets
to open slightly lower, with slowing economic growth likely to
cause profit expectations to come down.
                                
 The U.S. labour market shrank in June for the first time
this year, adding to fears of a sharp global slowdown in the
second half, especially with Chinese manufacturing activity
shifting down and property prices at risk of falling.
                                
 "Double-dip fears are the pervading influence on market
psychology at present even as European sovereign concerns
appear to be easing," said Mitul Kotecha, global head of
foreign exchange strategy at Credit Agricole CIB in Hong Kong.
                                
 Financial markets reflect a big decrease in risk taking as
a result of perceptions of the global economy. World stocks
have fallen 13.1 percent in the last two months
<.MIWD00000PUS>, the Australian dollar slid 8.7 percent <AUD=>
and emerging market bond yields have risen around 75 basis
points over U.S. Treasuries <11EMJ>.
                                
 This week the focus will be squarely on how central banks
will address signs of a coming global slowdown, with the
European Central Bank and the Bank of England both holding
policy meetings and the Reserve Bank of Australia and Bank of
Korea meeting as well. [ID:nN04230732]
                                
 Meanwhile investors are being bombarded by talk of a double
dip recession. The number of news articles with the phrase
"double dip" trebled in June, Factiva showed.
 (For a chart, click on:
                                
 http://graphics.thomsonreuters.com/10/FCT_CIT0710.gif)
                                
 DATA DEPENDENT
                                
 Japan's Nikkei share average <.N225> rose 0.7 percent,
though remained within spitting distance of a seven-month low
hit last Thursday.
                                
 After it fell 5.5 percent last week, some short-term
indicators pointed to oversold conditions, but incoming
economic reports could dictate where the market heads next.
                                
 "We're seeing a bit of short-covering now that we're past
the jobs data, but the market is going to want to see a lot of
the other indicators coming up this week, including those
linked to consumer spending," said Nagayuki Yamagishi, a
strategist at Mitsubishi UFJ Morgan Stanley Securities in
Tokyo.
                                
 The MSCI index of Asia Pacific shares outside Japan
<.MIAPJ0000PUS> rose 0.1 percent, with gains in resources and
technology shares mostly offset by declines in consumer
staples, financials and telecom stocks.
                                
 In the last two months, telecom and utility stocks -- two
sectors resilient to changes in business cycles -- have fared
the best. Commodity-related shares and technology were the
poorest performing.
                                
 Mainland Chinese stocks were Asia's biggest decliners. The
Shanghai composite <.SSEC> was down 0.7 percent, bringing
year-to-date losses to 27 percent.
                                
 China's fourth-largest lender Bank of China <601988.SS> saw
its shares slip 0.9 percent, the biggest drag on the composite
index, after the firm raised $8.8 billion in a rights issue
over the weekend.
                                
 The company's shares were down 1.8 percent in Hong Kong
<3988.HK> helping drive the Hang Seng index <.HSI> down 0.2
percent.
                                
 With the issue of Australia's mining tax largely settled
last week, it appeared some takeover deals were resurrected,
showing the economic uncertainty was not stopping mergers and
acquisition activity.
                                
 Australia's Centennial Coal Co Ltd <CEY.AX> agreed to a $2
billion takeover offer from Thailand's Banpu Public Co Ltd
<BANP.BK> while Singapore's Wilmar International Ltd <WLIL.SI>
struck a surprise deal to buy Australian conglomerate CSR Ltd's
sugar business for $1.47 billion.
                                
 U.S. markets will be closed for a public holiday, probably
keeping trading volumes light for the rest of the global
session.
                                
 In currency markets, the euro edged down 0.2 percent to
$1.2533 <EUR=> after it gained last week with the help of the
dollar's losses in the wake of the June U.S. employment report.
                                
 Short-term investors cut their net long dollar positions by
$2.7 billion to $9.5 billion in the week ended June 29,
according to data from the U.S. Commodity Futures Trading
Commission. The decrease in long dollar positioning coincided
with poor U.S. housing data and slowing in factory activity.
[ID:nN02150315]
                                
 U.S. crude futures rose 0.7 percent to $72.66 a barrel
<CLc1> after bargain hunters emerged with oil closer to $72.
                                
 Indeed, oil prices fell 8.3 percent last week compared with
a 3.9 percent fall in world equity prices, so rebalancing of
portfolios is inevitable.
 (Additional reporting by Elaine Lies in TOKYO and Eric
Burroughs in HONG KONG; Editing by Tomasz Janowski)