* World stocks ease on concerns over global growth slowing
* MSCI World P/E falls to level last seen in April 2009
* Double-dip fears in focus as China, U.S. slow
* Dollar off two-month lows
By Dominic Lau
LONDON, July 5 (Reuters) - World stock and oil prices fell
on Monday on growing concerns of slowdowns in the United States
and China -- the two main pillars of global growth, though the
dollar was off its two-month low.
Trading was expected to be light on Monday because of the
U.S. Independence Day holiday.
Data showing the U.S. labour market 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.
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Graphic on CFTC futures positioning
http://graphics.thomsonreuters.com/10/CFTC_CURR.html
Graphic on double dip monitor
http://r.reuters.com/kuv45m
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World stocks measured by MSCI All-Country World Index
<.MIWD00000PUS> dipped 0.2 percent after losing nearly 4 percent
last week. The index has lost 16.2 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.
By comparison, MSCI emerging equities index <.MSCIEF> had a
one-year forward P/E of 10.76, in line with its 10-year average
of 10.8, DataStream showed.
Europe's FTSEurofirst 300 <> drifted 0.1 percent
lower, with the continent's banks <.SX7P> losing 0.5 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."
However, "there is a certain amount of scepticism that the
stress tests (on banks) ... will either be fudged or the
complete results won't be published. What we need is clarity,"
said Felicity Smith, fund manager at Bedlam Asset Management.
In Asia, Tokyo's Nikkei average <> put on 0.7 percent,
while the Shanghai Composite Index <> dropped 0.8 percent.
Brazil's Bovespa index <> slipped 0.2 percent.
DOLLAR NEAR 2-MONTH LOW
The dollar <.DXY> added 0.3 percent against a basket of
major currencies, recovering from a near two-month low as
traders held back given the U.S. market holiday. The dollar
index lost 1.9 percent in the previous two sessions.
The euro paused after last week's boost from unwinding of
short and leveraged positions. It slipped 0.3 percent to $1.2521
<EUR=> and dipped 0.3 percent to 109.87 yen <EURJPY=R>.
The shared European currency has lost 12.5 percent against
the dollar 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 market last week was clearly concerned about a U.S.
slowdown. It was the first week in a long time we have seen the
dollar react like that," said Chris Turner, head of foreign
exchange strategy at ING.
"There is a creeping fear that the strong dollar environment
will start to break. That has not happened yet and it is likely
to be steady this week."
BNP Paribas said investors can cheaply hedge a cross-asset
portfolio against the risk of a double dip in global growth with
currencies. 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 government bond
futures <FGBLc1> 44 ticks higher to 129.75 from Friday's
settlement close, and yields on benchmark 10-year Bunds
<EU10YT=RR> fell 2 basis points to 2.545 percent.
In the commodity market, crude prices <CLc1> fell 0.4
percent to below $72 a barrel, extending last week's 8.4 percent
drops.
(Additional reporting by Kevin Plumberg in Hong Kong,
Charlotte Cooper in Tokyo, and Atul Prakash, Lin Noueihed and
George Matlock in London; Graphics by Scott Barber; Editing by
Toby Chopra)
