* World stocks ease, down for 4th session
* MSCI World P/E falls to level last seen in April 2009
* Double-dip fears in focus as China, U.S. slow
* Dollar just above two-month lows
By Dominic Lau
LONDON, July 5 (Reuters) - World equities fell for the
fourth day running on Monday and the dollar traded close to
two-month lows on growing concerns of slowdowns in the United
States and China -- the two main pillars of global growth.
Trading was expected to be light on Monday because of the
U.S. Independence Day holiday.
The U.S. labour market, which shrank for the first time this
year in June, slower Chinese manufacturing activity and euro
zone austerity measures fuelled concerns over prospects for the
global economy.
"Double-dip (recession) fears are the pervading influence on
market psychology at present even as European sovereign (debt)
concerns appear to be easing," said Mitul Kotecha, global head
of foreign exchange strategy at Credit Agricole CIB in Hong
Kong.
World stocks measured by MSCI All-Country World Index
<.MIWD00000PUS> drifted 0.1 percent lower after three
consecutive sessions of declines. The index has lost 16 percent
since mid-April, and is down 11 percent for the year.
The index carried a one-year forward price-to-earnings ratio
of 11.9, a level last seen in April 2009 and well below its
10-year average of 15.42, according to Thomson Reuters
DataStream.
Europe's FTSEurofirst 300 <> slipped 0.2 percent, with
the continent's banks <.SX7P> falling 0.6 percent.
French Economy Minister Christine Lagarde said on Saturday
that stress test results to be published on July 23 will show
that "banks in Europe are solid and healthy."
In Asia, Tokyo's Nikkei average <> put on 0.7 percent,
while the Shanghai Composite Index <> dropped 0.8 percent.
DOLLAR NEAR TWO-MONTH LOW
The dollar <.DXY> added 0.1 percent against a basket of
major currencies, recovering slightly from a near two-month low
as traders held back from chasing the greenback lower given the
U.S. market holiday.
The euro paused after last week's boost from unwinding of
short and leveraged positions. It slipped 0.2 percent to $1.2534
<EUR=> and dipped 0.2 percent to 110.07 yen <EURJPY=R>.
The single European currency has lost 12.4 percent against
the U.S. currency so far this year, though attention now appears
to have turned to concerns of a slowdown in the United States
and away from the euro zone's banking and government debt woes.
"The dollar is responding to weak signs in the U.S.
economy," said Lee Hardman, currency economist at Bank of
Tokyo-Mitsubishi UFJ.
BNP Paribas said investors can cheaply hedge a cross-asset
portfolio against the risk of a double dip in global growth with
currencies as the foreign exchange market has deep liquidity and
cheap implied volatility.
In a note, it recommended investors short a basket of 2/3
Australian dollar <AUF=D4> and 1/3 New Zealand dollar <NZD=> and
long a mix of Swiss franc <CHF=> and yen <JPY=>.
Global growth worries also sent German Bund futures <FGBLc1>
41 ticks higher to 129.72 from Friday's settlement close, and
yields on benchmark 10-year Bunds <EU10YT=RR> fell 4 basis
points to 2.547 percent.
(Additional reporting by Kevin Plumberg in Hong Kong,
Charlotte Cooper in Tokyo, and Tamawa Desai and George Matlock
in London; editing by John Stonestreet)
